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Mapping the Documents Needed for the Transaction
Example #6: Nonprofit's Subsidiary - Consulting Business
- A nonprofit acquires old apartment buildings then rehabilitates them using subsidy from local, state, and national governments. It has gained experience in regulatory compliance.
- To offset funding reductions it wants to sell consulting services to local governments to assist them in complying with the complex regulations governing the federal funding they get for affordable housing
- Nonprofit wants to set up subsidiary to sell consulting services. Three of its employees are to be partners in the subsidiary
- The subsidiary will subcontract with the nonprofit parent to perform the actual consulting work. The nonprofit will loan funds to the subsidiary to pay start-up costs