The following are the best answers we currently have on several questions; this is a document in progress, so if you can add to it please notify Phil Mahler at mahlerp@middlesex.cc.ma.us.

Disclaimer: This information is not legal advice. It could even contain errors.

NON-PROFIT ORGANIZATION

A non-profit organization does not have to incorporate to have non-profit status. Generally, non-profit status means your organization (affiliate) does not have to pay income tax; it often does not give an exemption from state sales tax, hotel tax, etc.

Check http://www.lib.msu.edu/harris23/grants/znpbib.htm for links on starting a non-profit organization. On starting a non-profit in Minnesota, check http://www.mncn.org/howto.htm .

INCORPORATION

AMATYC is a non-profit corporation under New York State laws. The main reason to incorporate has more to do with officer liability than tax status.

ON THE ISSUE OF INCORPORATING

The primary reason to become a corporation is to prevent an individual from being sued, i.e., personal liability. Since we are not dealing with corporations we must be non-incorporated associations (affiliates).

Usually before an entity gets sued (I did say usually) it had to do something negligent, i.e., something stupid, and someone got injured (Damages). Can we separate the association from say an individual who did something stupid? If we can, we probably would sue the individual (Keep in mind that when you sue you would like to get some money when you win. I am willing to bet that most individuals have deeper pockets than the non-incorporated associations, even if its their homeowner’s insurance) If we cannot or if the association is truly liable, then we would sue the association and everybody else (Remember we want to get money so we go after the deep pockets).

As far as incorporations go:

Since all the associations (affiliates) are non-profit and there is no problem with shareholders, or stocks, the NOLO Press publishes a how to book on how to incorporate.

It is pretty standard, you need an officer, an address for service, so they know where to send the complaint when they sue (that’s a pleasant thought), that the business is conducting itself within the law. They can throw in one or two more requests. One major concern is the state franchise tax, which always comes up front, in California it used to be $270.00. Many corporations become incorporated in Delaware, the Delaware Corporation, because it may be cheaper, as far as the franchise fee, and it might be a little harder to sue you since you are out of state. (Which means if a non-Delaware college wanted to sue a Delaware Corporation, even if they were situated in, say, New York, but incorporated through Delaware, they would have to go through Federal, i.e., District Court, where the rules may not be the same as State Court)

CONFERENCE LIABILITY INSURANCE

One university hosting an affiliate meeting posed an insurance requirement. Many small hotels do not require it.

AMATYC carries conference insurance. You may be able to purchase coverage without incorporating. This insurance should cover officer liability--check with the insurer.