Incorporating as a not for profit flying club...need some information

SteveR

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SteveR
Who here has been involved with a not for profit flying club? Was it a 501(C)(3)?

Thanks!

Edit: Actually, it looks like 501c7 or 501c4 are typically the most common.
 
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http://en.wikipedia.org/wiki/501(c)

You probably want to incorporate as a 7 and not a 3.

Quick course:
501(c)3 is for the benefit of society, e.g. school, church, etc
501(c)7 for the benefit of its members & is a social club

You can find the IRS details at

www.irs.gov
 
Agreed, but check with an Attorney. I have been on the Boards of both (c)3, and (c)7. One significant difference is in civic/political donations... A (c)7 has more leeway there. Taking the local County Commissioner to breakfast to describe a problem or issue that a (c)7's members are concerned about, for example... Again... Make sure the organization has a lawyer and use their advice. Also make sure that lawyer is listed as Council of Record per whatever voting requirements your by-laws and Charter require.
 
Due yourself a favor and have a corporate attorney guide you. its not worth running afoul of the IRS. Also your state may have laws that also govern how you incorporate and what you can and can't do that may differ from IRS guidlines. Best of Luck with the flying club.
 
Due yourself a favor and have a corporate attorney guide you. its not worth running afoul of the IRS. Also your state may have laws that also govern how you incorporate and what you can and can't do that may differ from IRS guidlines. Best of Luck with the flying club.

QFE.

A lot of people tried to abuse NFP's according to my (tax accountant) so some states have some pretty specific rules.
 
QFE.

A lot of people tried to abuse NFP's according to my (tax accountant) so some states have some pretty specific rules.

501(c)X is a Federal determination, not state.
 
501(c)X is a Federal determination, not state.

Correct. But you also typically have to be a non-profit under the State's rules also for State taxes (if any), etc.

The advice to find an Attorney and pay them to get it right, for your State, can't be stressed enough. Especially considering that the laws surrounding the "corporate veil" have been so weakened that it's almost not worth being involved in Non-Profits in a leadership role, since your personal assets are at tremendous risk if another Board member does something stupid.

Speaking of that. Carry liability insurance for the Board. Don't make them go out and buy a rider policy to their Homeowners or similar for their personal liability as a volunteer willing to run your club.

Many people with significant personal assets (and thus, great management experience and advice), are avoiding working on Boards of Directors for Homeowner's Associations, Civic Clubs and Organizations, and other Non-Profits because they don't want one yahoo on the board getting them sued and having to spend significant money defending their personal assets from a negligence suit.

Often-times these liability policies are very inexpensive and also cover liability for things like meetings, in case some club officer or BoD member did something silly like string a power cord for the night's presentation to the projector, and a member trips over the thing and injures themselves... just paying to defend against that suit could bankrupt many small clubs.

Look into having one. Marsh is one provider I've seen used successfully for such things.
 
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