Legal Question in Business Law in Alabama

Can I engage in business ventures outside of what is listed when the company X was formed? For instance, if I formed a company X to provide hotel management services, can I run a non profit under the same legal name X, and do business with a different name Y, and do another business Z, say an online dating site, also under the umbrella of the company X that was formed as a hotel management company?

Asked on 4/05/10, 2:46 pm

2 Answers from Attorneys

Judson Crump Judson E. Crump, Attorney at Law
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Technically, probably not. But if you're the sole owner of X, then you don't have shareholders who are going to hold your feet to the fire about sticking to your corporate purpose. So there'd be no one to enforce it but the Alabama Attorney General. Since Troy King is busy using taxpayer dollars to "fight Washington" in a battle that every constitutional lawyer knows he will lose, I don't think you'd have to worry on that end. However, if you want to be safe for the future (and you probably do) it would be easiest for you to just amend the articles of incorporation.

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4/12/10, 7:23 am
Edmund Burke Edmund B Burke, Attorney at Law
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Amending the articles is a simple fix.

If you want to run a non-profit, and have contributions to this non-profit eligible for tax deductions by the donors, you should form a new corporation that is expressly designated as not-for-profit. You can also seek a Determination Letter from the IRS that states that the company appears to be eligible as a 501(c)(3) non-profit company.

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4/12/10, 12:49 pm

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