Is anybody looking into forming a corporation to protect the club. If not, I'm starting to see what it will take. I did some research on the subject. I know the club can incorporate under New Jersey 501(c)(7), a non profit corporation. I'm in a ultralight club that incorporated under non profit 501(c)(7).
I will need some help. I'm not the greatest whiter. There are some forms that must be filled up. The cost is minimal compared to the benifits.
Quote from: vwtrike on July 21, 2009, 06:53:38 PM
I'm not the greatest whiter. The cost is minimal compared to the benifits.
yeah Rich, I dont think spelling is too high on that list either.
Just kidding buddy
I think el Presidante is supposed to be checking this out. hopefully he'll stop in and see this!
Yes!
We have have brought this subject up many times but didn't know where to begin. Any help would be appreciated.
Thanks
jt
I hope by the next meeting to have some answers.
Rich,
you might be onto something. I did some research on the web and found some conflicting info. One form of incorporation required you to be a completely charitable organization with the sole purpose to do charity stuff. You needed to establish this before incorporating. I could be wrong but I didn't see car clubs as listed. Now any info you might have could solve this mystery and give us a better direction to do some research.
Once you are a non-profit corp, you have to file federal/state tax forms each year. We had to do this for our hockey club. And a dedicated bank account, blah, blah, blah. You could also get a tax id to handle tax-free spending. I wouldn't think a car club qualifies for non-profit status.
What liability are you are trying to protect against?
I'm not a lawyer, but I stayed at a Holiday Inn Express...
QuoteI'm not a lawyer, but I stayed at a Holiday Inn Express...
I would listen to him!! I stayed their once also, and don't think it's needed.
Quotedon't think it's needed.
incoporation would protect the club and its officers ( which you are listed as one) from possible problems if the club is sued. Even if the action wasn't the clubs responsibility the fees and time needed to defend us would fall on the board and the members. Thats what needs to be protected even if the chances are remote.
As far as taxes I'd think an EIN number would be required if any kind of incoporation either profit or non profit was listed. This would require a yearly tax return but there are advantages. By listing and filing everything with the IRS we would have an accounting for any money taken in or donated. There could be a problem down the road if the IRS decides to come asking questions. With an EIN # and a return they don't have a reason. At tax time I work with 4 accounts, business and personal that require a return and are filed under seperate EIN#s, its no big deal.
Like it or not theres a lawyer under every rock looking for a "payday" why should we give him one ?
I'll see if I can get an opinion from a real lawyer, or at least he says he is. I don't know what "damages" somebody could claim as a result of a lawsuit to this type of club or its officers. Maybe put a disclaimer on the website somewhere that "Site Visitors assume all risk of injury as a direct or indirect result of posted suggestions of repair or other modifications made by members or officers of the SJVWC" - I think I saw this on some posting board somewhere...
IMHO, keep your dues money in an old brake drum and keep it simple. Otherwise you will start having to file sales tax reports on the sales of decals...
QuoteOtherwise you will start having to file sales tax reports on the sales of decals...
not so loud! the Feds might hear ya!
QuoteI don't know what "damages" somebody could claim as a result of a lawsuit to this type of club or its officers.
considering all the "slip and fall" stuff that goes on just think what would happen if somebodys car rolled into a spectator at an event. Sure your insurance covers most of that but you know how it goes, they will keep digging until its exhausted and then start looking anyplace else they can. A good friend got into a big lawsuit a few years ago because he sells gym equipment. A kid fell off of one of his items and the parents sued the school, manafacturer, and my friend. It got settled out of court and he never had to pay anything except his own lawyers consultation fees. But you can bet he wasn't sleeping too well while it was going on.
A corporation is to protect members, not just the officers.
There are many different categories of non profit. The one I would not even think to file is 501(c)(3). I am talking about 501(c)(7) Social & recreation clubs.
Under 501(c)(7) any donations made to the club ARE NOT DEDUCTABLE, but anything bought by the club is tax exempt.
I beleive non profit is issued through the state, not the IRS.
A good CPA can tell us more.
I'll try to have more info at the meeting.
No matter what type of corporation is formed, you still have to file a return
every year ($0) and you still have to collect, report & deliver sales tax on merchandise sales.
501 c 7 is for "Social Clubs". It's main benifit is if we zero ballance every year, dues are not income. BTW Non-Profit doesn't mean we cant make a profit, it means any profits are invested back into the club.
The "protection" is for Officers & Board members. They are protected from personal liability. This is the main reason for incorporating.
I am a member of another club that went through this, but we were lucky, we had a member that was an attorney. It's not extremely hard, it's just an insane amount of paperwork.
Quote from: vwtrike on July 22, 2009, 06:34:16 PM
Under 501(c)(7) any donations made to the club ARE NOT DEDUCTABLE, but anything bought by the club is tax exempt.
True but we have to collect & report sales tax on things we sell
Check this out
http://www.t-tlaw.com/lr-06.htm (http://www.t-tlaw.com/lr-06.htm)
I dunno, if Jack is good enough to help me with tips on replacing a muffler, and I get burned badly because I'm stupid enough to have run the car for an hour right before I go to replace the exhaust, and now I can't become that brain surgeon I always wanted to be, do I really have a case against him and the SJVC because I wasn't told to first make sure the muffler should be cooled down to a point you couldn't roast a pig on it? I IMAGINE its a possibility....about as much as me being a brain surgeon.
The hockey club I helped run was a 501c (3) because we begged for donations to get stuff for the kids and the donees demanded it. So, the cost to set this up was more than offset by the coin coming in from the donors. We had liability of course, but we had each member sign some waiver form for injuries and liability. C'mon, its hockey, a kid got hurt every week, sometimes from the hockey moms fighting in the stands.
Old brake drums hold alot of dues money.
The only reason I started to check into corporations is because somebody brought it up at the meeting and I thought I would help. If the club does not want to incorporate fine with me, but if they do, non-profit is the way to go.
1. Corporation tax is paid to the state if there is a profit or not.
A. Taxes is with State of NJ not IRS.
2. Non profit is exempt from this tax.
3. You can incorporate on line for $125.00.
4. Annual report is $25.00 I have a copy of the report. It can be filled out in 10 minute (If you don't know what your doing)
You're exactly right Rich it was brought up at the meeting and I spoke with Bob this evening about it at Webers. Continue on the path you're on & let him know what you find out.
QuoteI thought I would help. If the club does not want to incorporate fine with me, but if they do, non-profit is the way to go.
Rich,
don't stop! this is good stuff and sounds just like what we are looking for.
We can talk at the meeting so expect to be bombed with tons of questions by the BOD.
QuoteI dunno, if Jack is good enough to help me with tips on replacing a muffler, and I get burned badly because I'm stupid enough to have run the car for an hour right before I go to replace the exhaust, and now I can't become that brain surgeon I always wanted to be, do I really have a case against him and the SJVC because I wasn't told to first make sure the muffler should be cooled down to a point you couldn't roast a pig on it? I IMAGINE its a possibility....about as much as me being a brain surgeon.
remember the McDonalds coffee case a couple of years ago ? who would think a judge would award such a big payday for something so dumb. Sometimes the judges are worse than the lawyers!
Quote from: njgt-1 on July 23, 2009, 09:31:32 PM
Rich,
remember the McDonalds coffee case a couple of years ago ?
Time is flying Bob. Would you believethat was
15 years ago? c23
QuoteTime is flying Bob. Would you believethat was 15 years ago?
you are Soo right Jack, and its sad that things have only gotten worse.
When my mother in law broke her hip a couple of years ago we received all kinds of questions from her health care insurance about if there was a law suit involved. If there was ( and there wasn't) they would attach any awarded moneys to reimburse the payout to the hospital that took care of her. Unfortunatly she passed away shortly after. It makes you wonder where the hell your monthly fees are going, lots of lawyers I'm sure. This is getting off topic but if an insurance company can chase a poor old woman with a busted hip imagine what their lawyers can do to a car club!
Quote from: vwtrike on July 21, 2009, 08:04:47 PM
I hope by the next meeting to have some answers.
Rich:
If and When you have gathered all the information you feel that's adequate, you can either come to our next board meeting (watch for the posting) or we can discuss it before or after the general monthly meeting.
Thanks for looking into this. (love
jt