Is it legal or ethical to call my business “Charity Boutique” if I do not have nonprofit or charitable status? The whole idea of my business is helping local nonprofits on a regular basis since 10% of sales benefit local nonprofits the buyers select.
I am not aware of any legal reason you could not call your business Charity Boutique and I don’t see anything unethical about it as long as you don't represent your business as a charity. Your business model (irrespective of the company name) raises, however, very interesting and difficult questions about whether you may have to register under any applicable charitable solicitation registration statutes, either as a “charitable organization” because you are selling with a “charitable appeal” or as a commercial co-venturer because you are providing a percentage of your proceeds to charitable organizations. Misrepresentation, whether or not you should be registered, can get you in a lot of trouble. Check with a sophisticated lawyer to whom you can explain the full context of your operations. (See Ready Reference Page: "Co-venturing Can Benefit Both Business and Charity But May Be Regulated By Disclosure Laws")
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While I applaud the idea, I do think the name is somewhat misleading to customers. If I were shopping there I would assume that the entire or at least the majority of the purchase price went to charity. (Similar to Goodwill or other nonprofit storefront ventures.) Ten percent implies that it is not purely charitable in nature. I think other names could be used that show care and concern for the community but do not directly use the word "charity." --M.P. via email
I ran into a somewhat similar situation years ago in California when an accounting firm wanted to call itself "Nonprofit Accounting Group." The Secretary of State refused to allow that name specifically for the reason cited in the earlier comment by M.P. - that is that the name might be confusing and mislead consumers into believing the entity itself was a nonprofit.
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