Personal Judgement against Nonprofit Director

[washnonprofit]

I am the director of a nonprofit corporation which has been inactive for years, but now is involved in a project requiring donations to buy special equipment.

The corporation is a 501(c)3 and was set up with just three directors.

I have received an offer from someone who can contribute a substantial amount which would get the project going, but we would eventually need more donations to take it to the next level. But the potential donor wants to be a "partner" and wants to have some say.

How does someone become a partner in a nonprofit? (Note that nobody is looking for ways to make money with this and there will be no salaries, at least in the foreseeable future).

A complication is that I currently have two substantial judgments against me, which I will eventually discharge in chapter 7, but I'm delaying that filing until early 2013.

Is there any way I can structure our corporation so that those who have judgments and eventually the bankruptcy attorney would not have access to the nonprofit corp assets? If I need to step down as director, is there any kind of agreement I can make to be able to get back on the board after I take care of my bankruptcy? I have already put a substantial amount of my own funds and time into this project, and I would hate to have to walk away from it and turn it over to someone else, but the primary concern is that the project survives.

[AFFA]

I wish to inform you that non profit assets cannot be taken to meet your debts. In this regard non profit organization is a separate legal entity from you and thus assets of non profit are not your assets therefore bankruptcy proceedings may not take non profit assets. If any party intends to invest in non profit organization then that person can invest and can become a director if non profit members desire but cannot earn profit out of non profit. Salary to the members who are working in non profit can be paid. It is necessary that non profit must be registered.

AFF

[Friend In Court]

Originally Posted by washnonprofit I am the director of a nonprofit corporation which has been inactive for years, but now is involved in a project requiring donations to buy special equipment. The corporation is a 501(c)3 and was set up with just three directors. I have received an offer from someone who can contribute a substantial amount which would get the project going, but we would eventually need more donations to take it to the next level. But the potential donor wants to be a "partner" and wants to have some say. How does someone become a partner in a nonprofit? (Note that nobody is looking for ways to make money with this and there will be no salaries, at least in the foreseeable future). A complication is that I currently have two substantial judgments against me, which I will eventually discharge in chapter 7, but I'm delaying that filing until early 2013. Is there any way I can structure our corporation so that those who have judgments and eventually the bankruptcy attorney would not have access to the nonprofit corp assets? If I need to step down as director, is there any kind of agreement I can make to be able to get back on the board after I take care of my bankruptcy? I have already put a substantial amount of my own funds and time into this project, and I would hate to have to walk away from it and turn it over to someone else, but the primary concern is that the project survives.

Is the corporation still listed as active with the State? Or do you need to file to revive the corporation?

The bankruptcy filing should not affect the non profit for you are taking personal bankruptcy and the non profit is a separate entity. I cannot see why you believe the non profit would be involved in your bankruptcy.

Since you have a bankruptcy lawyer, he or she can best advise about any exposure of the corporation or your shares in it. Unless you are an employee of the corporation and taking wages, your interest in the corporation should be minimal unless it is carrying a substantial book value and then your shares might be invcluded. Your bankruptcy lawyer should have access to all your financial information and would be the best informed source for advice.