Community Theater Green Room Discussion Board: SOLE PROPRIETOR OR NON PROFIT

Dear crwalsh1,

Our CT is strictly non-profit, so I can't really comment on that for yours. However, in my real job I do counsel a lot of people who are starting businesses. That's where I'm coming from for this.

Basically, it's your call -- do whichever. Creating a non-profit corporation will probably cost more in legal fees to start because of your state's requirements for a 501c(3) corporation. But if it actually makes money (wouldn't that be nice) you can use it to improve the program without having to worry about taxes, because it is not "profit."

A sole proprietorship in most states treats all income as the proprietor's. Therefore, it is all taxable. Of course, you still have the ability to deduct all expenses, as well. It is significantly simpler to set up than is a non-profit corporation, but if you actually make a profit, it is taxable.

Finally, check out your state laws carefully. They vary a lot from state to state and whatever you do, you want to be sure you are operating legally.

Whichever option you choose, please take the time and spend the energy to develop a business plan and even a simple strategic plan to help you focus on exactly what it is you want. It's about the best way to ensure all the players are focused on the same thing, and will also help you identify start-up expenses and problems that you might otherwise overlook. Even though you may be working with a very tight group of family and friends, those folks often have a different perception of what the focus is. Thorough planning sessions are important. I'd be happy to help facilitate those, but I'm not in your part of the country! (I recently facilitated strategic planning in my CT and it really opeened a lot of eyes. I do that sort of thing in the real job.)

Lastly, break a leg! I wish you the best success.

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Hello, just joined this forum. I'm creating a group as a "cooperative theater Company" on a profit share basis. It is, strictly, a sole proprietorship. The team will be involved for the love of theater, and if we make money over our expenses, we will all share in that.

We'll see how this goes, and we will still need a patron to make it viable.

Creating a new company!

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Author	Message
crwalsh1 Walk-On Joined: 4/26/06 Online Status: Offline Posts: 0	Topic: SOLE PROPRIETOR OR NON PROFIT Posted: 4/26/06 at 11:46am
	We're starting a children's theater company in Massachusetts and we would love any and all business advice anyone may have. For example, What's better? Registering as a Non-profit or sole propreitorship? Thank you!
	Christine R. Walsh

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jcorkran Walk-On Joined: 4/13/06 Location: United States Online Status: Offline Posts: 0	Posted: 4/27/06 at 5:53pm
	Dear crwalsh1, Our CT is strictly non-profit, so I can't really comment on that for yours. However, in my real job I do counsel a lot of people who are starting businesses. That's where I'm coming from for this. Basically, it's your call -- do whichever. Creating a non-profit corporation will probably cost more in legal fees to start because of your state's requirements for a 501c(3) corporation. But if it actually makes money (wouldn't that be nice) you can use it to improve the program without having to worry about taxes, because it is not "profit." A sole proprietorship in most states treats all income as the proprietor's. Therefore, it is all taxable. Of course, you still have the ability to deduct all expenses, as well. It is significantly simpler to set up than is a non-profit corporation, but if you actually make a profit, it is taxable. Finally, check out your state laws carefully. They vary a lot from state to state and whatever you do, you want to be sure you are operating legally. Whichever option you choose, please take the time and spend the energy to develop a business plan and even a simple strategic plan to help you focus on exactly what it is you want. It's about the best way to ensure all the players are focused on the same thing, and will also help you identify start-up expenses and problems that you might otherwise overlook. Even though you may be working with a very tight group of family and friends, those folks often have a different perception of what the focus is. Thorough planning sessions are important. I'd be happy to help facilitate those, but I'm not in your part of the country! (I recently facilitated strategic planning in my CT and it really opeened a lot of eyes. I do that sort of thing in the real job.) Lastly, break a leg! I wish you the best success.
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krisk71 Walk-On Joined: 4/12/07 Location: United States Online Status: Offline Posts: 0	Posted: 5/01/07 at 10:00pm
	I operate a theater group as a DBA- basically Sole Prop. I do it to avoid many issues such as boards- I make all my decisions for my group, and don't risk losing it at any point. I report my income etc... to the IRS quarterly, I have insurance on the business/group etc... Feel free to email me.
	Kristina www.capitalareaproductions.com
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sethnic Walk-On Joined: 8/23/07 Online Status: Offline Posts: 4	Posted: 8/23/07 at 1:46pm
	Hello, just joined this forum. I'm creating a group as a "cooperative theater Company" on a profit share basis. It is, strictly, a sole proprietorship. The team will be involved for the love of theater, and if we make money over our expenses, we will all share in that. We'll see how this goes, and we will still need a patron to make it viable.
	Creating a new company!
	IP Logged

Money Talk
Community Theater Green Room Discussion Board :Theater Administration :Money Talk

Topic: SOLE PROPRIETOR OR NON PROFIT( Topic Closed)