converting from non profit with stock to for profit

[bertpast]

What is the name of your state (only U.S. law)? I am from Pennsylvainia. I am currently involoved with a gun club that is incorporated as a non profit but we issue shares of stock in certificate form to the members when they first Join the club.After becomming a member we also get more shares for the dues we pay each year.We dont get these shares in a certificate form (is this legal?). Now we are trying to convert to a for profit co. and we need to know if any or all of these shares are any good? Everthing I read says non profit companies can not issue shares. Is this correct? We also have in the bylaws that is you stop paying dues you lose any and all stock you may hace aquired. Is this leagal to do?
Please help with my gun club nightmares**************..

 

[tranquility]

Look to your organizing documents. One requirement to be a true "non-profit" is to have a method of distributing assets if the corporation is dissolved. (Usually a donation to another charity.) Here you will dissolve the corporation and start a new one.

Why?

Think of it this way on a much larger scale. Let's say three people started out a wonderful anti-cancer charity. They took in donations and the like and never paid taxes on the money. With the donations they build buildings and buy vehicles and put money in the bank to later donate to research institutions. Maybe they have thousands of employees because of the phenomenal growth and good works--all without any taxes paid. (Except for on their salaries.)Then, they sit back and say, "Hmm....why don't we three convert our non-profit to a profit corporation? That way WE now own the buildings, the vehicles and the money in the bank all without any taxes paid now or in the past. Booyah!"

See the problem? I know you're not talking about that level, but it is the same problem.