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Can a for-profit have a nonprofit subsidiary?

Your Legal Questions Answered

Can a for-profit have a nonprofit subsidiary?

Can a for-profit have a nonprofit subsidiary?

Yes. For-profits often create wholly-controlled nonprofits to serve as private foundations for their philanthropy. It is less likely, thought not illegal, that a for-profit would create a nonprofit subsidiary for other purposes. The IRS would carefully scrutinize such an arrangement for possible private inurement or private benefit to the parent for-profit organization.

Sunday, February 3, 2008

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