Second, you will likely run into tax issues with the transfer of assets from the for-profit to the not-for-profit company.
Third, the governance and operation of the not-for-profit is different from running a for-profit enterprise.
Before you think about making this change, realistically evaluate the likelihood that government sources of income will flow your way--and soon. Otherwise, you could find yourself in deeper trouble for mismanaging a nonprofit.
Make sure you consult with an attorney and an accountant who are well-versed in non-profit issues.
Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.