Which type of Corporation would fit best?

[hanue]

I would like to start a program that accepts donations, invests them in world markets, and then sponsors applicants to do mission-related work. Several people have mentioned that I should find out what the legal liabilities would be for a charity program before accepting donations.

If the corporation is public, there is a lot of hoops to run through, I need to know what hoops those are. If it's not public (eg private) is there more flexibility for me to run the corporation in a manner consistent with my goals?

Can an organization accept donations and not be a charity? Can for-profit corp.'s accept financial contributions without legal liabilities from donors?

The program is designed to sponsor applicants 67% of expenses for a defined mission expense. The appliant upon acceptance into the program will deposit their 33% to us for 5 months where we will invest both our funds, and their deposits in various markets. On month six, the corporation will cut a check to the mission organization for the applicants use. According to my calculations, at minimum I need to generate 9% per month to make this a profitable exchange. I think that is reasonably attainable. I believe I could make approx 14% on average over a diversified portfolio in several markets.

The applicant will be able to participate in the mission work at a third the cost of the actual expense. In return, our company will benefit from additional proceeds from investments to ensure future sponsorships. I have already determined that I would need approx. $2000.00 + applicants portion invested for 5 months to be able to cut a check in that short of time and still make the money grow faster than just using my original capital. figured for a $1500.00 mission expense. ($1005.00, our expense, and $495.00 their expense)

The corp would accept donations or love-offerings to suppliment our investment base (the fund where the $2000 comes from) and after the check is cut, the remaining funds would go back into the investment base for future sponsorships.

What corporation, or tax strategy should be best for me to accomplish this? I plan to incorporate in NV. What financial liabilities would I have to my donors and applicants? I realize I would need cash assets to cover their deposits. Also, Are there litigous pot-holes I need to be aware of?

 

[mike]

I would like to start a program that accepts donations, invests them in world markets, and then sponsors applicants to do mission-related work. Several people have mentioned that I should find out what the legal liabilities would be for a charity program before accepting donations.

If the corporation is public, there is a lot of hoops to run through, I need to know what hoops those are. If it's not public (eg private) is there more flexibility for me to run the corporation in a manner consistent with my goals?

Can an organization accept donations and not be a charity? Can for-profit corp.'s accept financial contributions without legal liabilities from donors?

The program is designed to sponsor applicants 67% of expenses for a defined mission expense. The appliant upon acceptance into the program will deposit their 33% to us for 5 months where we will invest both our funds, and their deposits in various markets. On month six, the corporation will cut a check to the mission organization for the applicants use. According to my calculations, at minimum I need to generate 9% per month to make this a profitable exchange. I think that is reasonably attainable. I believe I could make approx 14% on average over a diversified portfolio in several markets.

The applicant will be able to participate in the mission work at a third the cost of the actual expense. In return, our company will benefit from additional proceeds from investments to ensure future sponsorships. I have already determined that I would need approx. $2000.00 + applicants portion invested for 5 months to be able to cut a check in that short of time and still make the money grow faster than just using my original capital. figured for a $1500.00 mission expense. ($1005.00, our expense, and $495.00 their expense)

The corp would accept donations or love-offerings to suppliment our investment base (the fund where the $2000 comes from) and after the check is cut, the remaining funds would go back into the investment base for future sponsorships.

What corporation, or tax strategy should be best for me to accomplish this? I plan to incorporate in NV. What financial liabilities would I have to my donors and applicants? I realize I would need cash assets to cover their deposits. Also, Are there litigous pot-holes I need to be aware of?

Is this supposed ot be a non-profit company? Frequently people create 501(c)(3) corporations which provides for federal tax exemption. I'm not sure I understand but it seems that you plan on having a person provide you with 33% of the money and that somehow you'll be able to supply an additional 67% to pay for an entire mission (for a year) in six months' time.

A public corporation is a costly proposition and ask why you are intending to do so when the company has no operating history.

A non-profit corporation means that the company's operation and benefits do not inure to to the reward of an individual. Whether this qualifies under your state law I don't know.

Third, if this is a company that does financial investing (which it does) then you will need to be aware of any federal regulatory rules.

If you think making 9% per month is reasonably attainable, then I'd like to know what your method is and wonder why you'd form this company rather than going right for the gusto and then using some of the huge profits you'd make and send some to sponsor missions.

 

[hanue]

Georgew,
Hey Thanks for the response. Actually the missions usually last about 10 days. The $1500 cost includes travel, food, and lodging. Usually a mission consists of around 30-60 members. the cost for tools, materials, and native help comes from the organization that is running the mission.

I would like to operate a fund that will provide the means for members to participate at a lower personal cost to them.

You asked why I wouldn't just invest my own money and then sponsor people from those proceeds. The reason being, I would like to start this project early, and it will take me close to five years investing my own funds to provide the amount of starting capital I need. By having members enter into an agreement with the company to provide 33% as their portion, accrual time will be significantly reduced and the members that are just looking for a cheap vacation will be filtered out. We want people that have their hearts into the mission, and are willing to work for it.

We have since made some changes to the project. Instead of investing members funds directly (causes risk for the member) we have decided we should hold the members deposits in escrow, invest our own funds to provide the sponsorship and then upon successful completion of the contract, the member signs over the amount in escrow to the company. Our company will grow slowly since we are taking in $500.00 for every $1500.00 that goes out, but we will control this loss by timing the sponsorships. If market trading is bad for a time and we are not able to meet our end of the contract, the member is refunded their deposits from escrow at no loss to them financially.

The concept here for the company is not to make as much money as possible (as weird as that sounds) but is to provide a service to empower people to participate in a life-changing event such as helping those less fortunate than themselves. There is little I can think of that can put your life into perspective better than to see people that have it a lot worse than I. That experience should be affordable to everyone and I want to make that a reality by using my skills as an investor.

The logistics of the company is what we are ironing out now... Time will tell if I can profit more than my planned losses.

Cheers,