Friday, April 16, 2010

US – A New Type of Entity

We posted an article earlier this week on a symposium hosted by Catholic University in Washington, DC.  During the symposium, Russell Sullivan, staff director for the Senate Finance Committee, raised an issue currently under consideration by Congress; the creation of a new type of entity somewhere between tax exempt nonprofits and private taxable companies.  Mr. Sullivan referred to the new choice of entity as a “for-benefit corporation.”

The Chronicle of Philanthropy reports that an example of the kind of company that falls into this in-between category are the state-based cooperatives being created to sell insurance under the new healthcare reform legislation.  These cooperatives are not state-owned entities, but they are also not the usual private-sector driven corporations

Mr. Sullivan stated that the issue is that the US tax code tries to put companies in one of two buckets, either for-profit and taxable, or not-for-profit and exempt.  The problem is that profit and social good are less mutually exclusive than they once may have been and companies are blurring the lines more as the purposes for which they are organized become increasingly complex. 

SS

http://lawprofessors.typepad.com/nonprofit/2010/04/us-a-new-type-of-entity-.html

Current Affairs, Federal – Legislative | Permalink

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