Vigilante
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My salary is expensed before profits are calculated. Dozens of companies advertise “all profits to charity” and still allow for corporate salaries. Newman’s Own is a fair example although their structure is a bit different...
That said, your point is taken and I will look elsewhere for advice.
Them :
Newman's Own is a food company founded by actor Paul Newman and author A.E. Hotchner in 1982. The company gives 100% of the after-tax profits from the sale of its products to Newman's Own Foundation, a private non-profit foundation which in turn gives the money to various educational and charitable organizations.
Newman's is a FOR PROFIT company. They then donate what ever is left over to a separate 501(c)(3) that he set up. The for profit company is what is called a FEEDER company --- they are a for profit entity and then they feed the non-profit from the net, net, net profits of the feeder company.
You :
So I’ve set up a company that sells goods and gives 100% of profits to charity.
Understand the difference. Gross profit is defined by
Revenue/Retail Price Paid by Consumer
minus
Selling costs
minus
Cost of Goods Sold=
Gross Profit
When you state "all profits" that would be Gross Profits.
What you mean is NET profit, or profit net of expenses, or after tax profits like Newman describes above. That's a huge difference.
You may think I am splitting hairs, but that is EXACTLY what could land you a civil fine or a prison term depending on whom ever calls you on it. You can't advertise "gives 100% of profits to charity" and then not. You look at it as a mis-statement, but the FCC and your state attorney general would not see it the same way.
You don't give all of the profits to charity. You give a percentage of the proceeds to charity, or net, net profit net of expenses to charity.
If you're not a 501(c)(3) you're not a not for profit LLC. You're a for-profit company that donates to charity. Even your corporation structure would suggest as such. That's OK, that's the way Newmans does it.
The company can accept donations but donations to a for-profit company are not tax exempt.
Your legal adviser may tell you the best way to do this is the right way - set up a non-profit that the for-profit can feed.
Good luck. Don't let this stop you from doing good and changing the world. Look at it as a chance to gain mastery over a new area of learning for you.
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