ASK THE BUSINESS LICENSE GURU

By David Yount

Question:

“What licenses are required for Commercial Co-venturer?”

Answer:

A Commercial Co-Venturer is a person or company who is primarily engaged in for-profit business, not associated with a charity, who then partners with a charity and donates a portion of its sales to the charity. The for-profit company generally makes charitable solicitations as part of its product or service marketing. For example “5% of every purchase will be donated to X” or “$2.00 per box will be donated to X.” Most states have laws regulating these types of solicitations.

If a for-profit company advertises that the purchase of any goods, services, or anything of value will benefit a particular charitable organization it is deemed a “co-venturer.” Some states require Co-venturers to register with the state before they begin soliciting. The California Office of the Attorney General requires an annual registration statement with a $350 fee. The Alabama Office of the Attorney General also requires an annual registration statement with a $100 fee and copies of any contracts between commercial co-venturers and charities. In Massachusetts, a registration statement, $25,000 bond, $200 fee, copy of contracts, and a financial report are all required annually for Commercial Co-ventures.

Legal requirements imposed by different states vary greatly. The most common requirement is that there is a written contract between the company and the charity describing in detail the description of the goods or services, area where the promotion will be offered, and how the charitable organization will receive its donation. Some states also require that the advertisements disclose the specific amount being donated. Companies who have failed to meet state rules and regulations have been subjected to enormous fines and penalties.

LicenseLogix will help any business who wants to become a Commercial Co-Venture obtain all licenses and registrations required, minimizing time-consuming and costly delays. We can also manage ongoing compliance by filing all renewals and annual reports. For additional help you can fill in the form on the bottom or give us a call at (800) 292-0909.