I own a clothing label and am Currently am in the process of starting a non-profit branch. I have been suggested (by legalzoom) to include a conflict of interest policy in my bylaws but from what I have read detailing them. It essentially states me as a disqualified person. Can you please give me some more information about this? Is the Conflict of interest policy nessesary? If so, what is the best way to go about this to avoid any legal complications now or in the future?
1 Answer from Attorneys
Why, in the world, are you starting a non profit entity to sell clothing. What charitable purpose exists for the entity. Is there some reason why the sale of clothes should not be taxable as a business operation. Selling to churches or hospitals does not make you tax exempt. Even if it is so organized, you will likely have unrelated business taxable income.
Start with the basics. A non profit organization is not a "do it yourself" concept in all but the simplest situations.
If you do have a conflict in a non profit, you are likely involved in prohibited transactions, which cause extensive penalties.
Please see a capable attorney or accountant to help advise you. Conflict policies are the least of your worries.
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