501c3 Nonprofit looking to start a social enterprise (not-for-profit) business to generate revenue and the net income generated by the social enterprise will be utilized by 501c3 to support the nonprofit mission. These “not-for-profit” business activity could include “medical kits & Device Assembly services or personal care product distributions”. The "not-for-profit" project could utilize both regular employees as well as a mix of special class of employees (students, veterans, differently-abled, etc) as part of providing life skills training program.

We have some specific questions about the IRS 1023 Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code.

Do you recommend creating a separate operating entity (LLC or Nonstock corporation) to conduct the “not-for-profit” business activities that generates profits which is transferred to the 501c3 nonprofit by filing a separate 1023 application?

Are there any restrictions on the types of employees we need to use to get the “not-for-profit” status approval for IRS?

Can this new "not-for-profit" operate like a “for-profit” business to provide financial support to the existing 501c3 nonprofit”?

Do you recommend creating a normal LLC/nonstock corp and have an exclusive commercial co-venture agreement with the existing 501c3 nonprofit? or create another 501c3 application for the social enterprise "not-for-profit)"Which is the best option?

Thank you