Troop looking to incorporate

[taamland]

My troop is looking to incorporate itself. We would like to have a buffer in case anyone sues individual leaders, they would have to sue the coroporation first. Becomming incorporated we could file for nonprofit 501c3 status and accept donations from local corporations. We would also like to prevent ourself in the unlikely event it happens from our charter organization the church from taking our money and equipment. How would this work from a leagal standpoint? Doesn't BSA Liability insurance already protect individuals from being sued. As far as equipment and money goes wouln't we need to charter ourselves to the corporation for this to work? Or would we have to keep separate books? I'm not a lawyer or accountant nor do I play one on TV so I'm asking for advice what are the benefits of incorporating and is this even legal?

 

 

[hotdesk]

The first thing that I would say is that BSA does carry liabilty insurance incase any of its volunteers (council, district, and even unit level) are named in a lawsuit for an accident that happened during a BSA activity.

 

The next thing is that the chartered organization only takes money and/or equipment when the unit folds. Even then if they want to keep the equipment they have to have the intentions of establishing a BSA unit in the future or the equipment goes to the council level (as it was funded with money earned in the name of scouting).

 

I know that my unit did this several years ago. The main reason was to buy a unit bus and make sure that the corporation was at fault if anything was to happen. However, once the Scoutmaster of the unit died the corporation did also and the bus was transfered to the chartered partner's name.

 

Personaly, I don't think that this is necessary.

[FScouter]

If you're concerned about being protected, it might be more productive to avoid doing stuff that would cause a lawsuit. Rather than looking for protection after the fact, you might be better off avoiding things you should't be doing in the first place.

 

Better for the boys, for BSA, and for the adults that you all learn the BSA program, get trained, and follow the rules. That's everybody's best protection.

[Kahuna]

There are a lot of good reasons to incorporate, but liability is not one of them. You can't realistically provide yourself with more coverage than BSA offers.

 

Also, you cannot incorporate a unit. What you can do is create a corporation, get a 501©(3) status and then sponsor or co-sponsor yourself. There is an issue, of course, in that your current CO owns the unit and the equipment. Therefore, you must get its consent to transfer sponsorship and/or equipment. They can hang onto both if they wish.

 

You can also create a corporation just to own equipment or vehicles, which it then leases to the troop for $1.00 a year.

 

There are some issues in that you have to dot all the i's and cross all the t's or your corporation won't do what you want it too. (Read: get a lawyer.)

 

If your only concern is liability of leaders, just make sure everybody is properly registered and then follow all the G2SS guidlines, get tour permits and you have (almost) nothing to worry about.

[fotoscout]

Yeah, they could have virtual meetings, virtual patrols, virtual outings, virtual camp, and virtual advancements, all from the safety of their homes while sipping warm milk.

[scoutldr]

On the advice of my financial planner, I purchased a $2 million umbrella liability policy from State Farm. Cost was less than $300 per year. If something should happen (God forbid), I am not counting on BSA to be in my camp (no pun intended). You may not need that much, but with the escalating value of homes and 401(k) funds, it's not that much any more.

[Eamonn]

Before you go to far you might want to take a look at the fees the IRS Charge.

They all went up on the first of this year.

Eamonn.

[ljnrsu]

This is not something I would recommend as an accountant in NJ for your unit.

As Kahuna said a unit can not be incorporated, you would have to create your own 501©(3) corporation.

You would need to file IRS form 1023 for tax exempt status,the form is 28 pages. Filing fee for the form for reciepts of less than $10k is $150 increasing to $300 on July 1,2006. If receipts are greater than $10K the fee is $500 increasing to $750 on July 1,2006. Unit books are included in the corps books for IRS filing. Receipts includes all monies that pass through your checkbook.

Even if the IRS grants tax exempt status you would then need to file for tax exempt status with the State of NJ as Fed tax exemption does not mean automatic state exemption.

NJ requires corporations to carry workmans compensation including tax exempt/non profit on all corporate officers whether or not they recieve any compensation.

The costs of maintaining a tax exempt corporation may be a few hundred dollars per year.

As others have said BSA does provide liability insurance to leaders in case they are named in a lawsuit.

Personally its just not worth going through the work and costs involved.