Should Our Square Dance Club Incorporate?

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klneutral
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Should Our Square Dance Club Incorporate?

Post by klneutral » Fri May 19, 2017 7:19 pm

I recently became treasurer of our square dance club, consisting of 34 members. We are an unincorporated, tax-exempt organization.

We buy insurance through United Square Dancers of American and they provide $1M for bodily injury and property damage, as well as $10K for medical expense. They recommend that the club incorporate to limit liability to its members, saying that should a big suit come along, every member could be held accountable.

We are weighting whether the the extra liability protection offered by incorporating is worth the extra expense to the club and the burden of paperwork on the treasurer.

I checked with the company that provides my personal umbrella liability insurance and they could not say whether they would cover me or not. They recommended that we be sure to take the club insurance offered by United Square Dancers of America.

Bogleheads, what do you think?

Dottie57
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Re: Should Our Square Dance Club Incorporate?

Post by Dottie57 » Fri May 19, 2017 7:22 pm

Who would sue square dancers. And for what?

Daryl
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Re: Should Our Square Dance Club Incorporate?

Post by Daryl » Fri May 19, 2017 8:01 pm

I'm not sure if I would incorporate for the extra liability protection. Off the top of my head, I can't think of any reason you'd get sued, but if it did happen, the plaintiff and their lawyer would just name both the club and the individual members in the suit.

I'm the secretary for a similar sized organization, though we have significantly more legal exposure due to the nature of our operations (flight training). We are incorporated and are a 501c3 nonprofit. We took these steps to help with fundraising. We have some significant capital expenditures over the next year or two. The paperwork isn't too onerous for small non-profits. Do you have any upcoming fundraising requirements?

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klneutral
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Re: Should Our Square Dance Club Incorporate?

Post by klneutral » Fri May 19, 2017 8:14 pm

Dottie57 wrote:Who would sue square dancers. And for what?
I don't know, but here is what United Square Dancers of America say:

What would you do, as a dancer and member of a club, if someone sued your Dance Club?
Have you ever thought about it? Well, you should! You say it will never happen to your
club? Ha, it has already happened several times in recent years. If someone should sue
your non-incorporated club for liability in excess of your insurance coverage, for
breach of contract or for civil damages, you and each member of your club could be held
separately and jointly responsible. What that means is, if the court finds against your club
and there isn't enough money in the club treasury, then the balance comes out of
your pocket.

J295
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Re: Should Our Square Dance Club Incorporate?

Post by J295 » Sat May 20, 2017 9:17 am

Proper LLC or corporate status would add a layer of protection. Whether to do it or not ..... ????

Note: You may want to look at your state statutes to see if members have an protection generally under state law. For example, in our state if you are volunteering for a "non-profit" then you can generally not be sued for your uncompensated actions on behalf of the non-profit.

Jackbnimble
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Re: Should Our Square Dance Club Incorporate?

Post by Jackbnimble » Sat May 20, 2017 9:38 am

Dottie57 wrote:Who would sue square dancers. And for what?
Not sure who, but for what: Those outfits! :D

It's probably a good idea, but I would probably shop and see which is initially cheaper and yearly cheaper, incorporating or an LLC.

I used to explain insurance and incorporating to clients as a football analogy. You are the QB and insurance is a lineman and incorporating is another lineman. They are protecting you from the linebacker. The more the merrier.

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dm200
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Re: Should Our Square Dance Club Incorporate?

Post by dm200 » Sat May 20, 2017 10:02 am

klneutral wrote:I recently became treasurer of our square dance club, consisting of 34 members. We are an unincorporated, tax-exempt organization.
We buy insurance through United Square Dancers of American and they provide $1M for bodily injury and property damage, as well as $10K for medical expense. They recommend that the club incorporate to limit liability to its members, saying that should a big suit come along, every member could be held accountable.
We are weighting whether the the extra liability protection offered by incorporating is worth the extra expense to the club and the burden of paperwork on the treasurer.
I checked with the company that provides my personal umbrella liability insurance and they could not say whether they would cover me or not. They recommended that we be sure to take the club insurance offered by United Square Dancers of America.
Bogleheads, what do you think?
One issue is the cost (initial and ongoing) of incorporating. BUT - if the other such groups have done this, maybe you can follow what they do to limit costs. maybe talk to some other such groups that have done this.

Never been a square dancer, but I find it a stretch to think of what could go wrong for more tham $1 Million?

sambb
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Re: Should Our Square Dance Club Incorporate?

Post by sambb » Sat May 20, 2017 10:54 am

why have a formal club, just get together and have fun,

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