For Profit Subsidiaries

Posted on Wednesday, April 22, 2015

It is not uncommon for nonprofit organizations to form for-profit subsidiaries.  These for-profit subsidiaries are most frequently found in hospitals and colleges but other 501(c)(3) organizations also have for-profit subsidiaries for a variety of reasons.


Type of Entity

The most common types of entities selected for a for-profit subsidiary are a corporation or an LLC depending on the nonprofit’s goals.  However, there are many things to consider when choosing the type of entity.  Please contact your accountant to determine the best entity type for your specific circumstance.

If your nonprofit is considering forming a for-profit subsidiary, make sure you consider all of the advantages and disadvantages prior to formation. 

Posted by: Carrie Minnich, CPA

Posted in Mission Minded Nonprofits

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.

"During the later months of 2015, our program found ourselves upside down due to several problems and in need of a change.  We needed to find a professional CPA Business who could help us get…"

Kevin Pauley, Treasurer

Grant Co. Sheriff's Dept. Chaplaincy Program