Beyond establishing a constitution and by-laws, the question of incorporation is one that you and your fellow club members may want to consider. Simply stated, incorporation means that you as an individual member of the club can’t be held liable for the negligence of others in the club should they be involved in a lawsuit against the club and its members.
To get corporate status for your club, you must file the appropriate documents with the secretary of state. Most clubs file simple “Articles of Agreement” stating that the club is a voluntary corporation established for the purpose of furthering the sport of motorcycling and with no capital stock. It’s relatively simple to file incorporation papers, but it’s wise to have a lawyer do it. To save time and money, be prepared for your visit with the lawyer. Take along a copy of the constitution and by-laws and have two or more club officers present. Also, be prepared to pay a filing fee.
Protecting Your Club Name
The AMA has a database of club names, but often times, clubs want to protect their name more broadly. The best way to do this is to see if the name you wish to claim for your club is already protected by another group. A quick search on the internet will often reveal if a group already exists with the name you want. Then you can check your state’s Secretary of State website to see if they have protected/registered their name. If no entity exists with the name you wish to use, then you can file with your state’s Secretary of State to further protect your name.
If considering incorporation, be aware of the following points.
An unincorporated club:
• Is a voluntary association that in the eyes of the law isn’t an entity or a person.
• Has no legal standing as an organization.
• Cannot own, convey or mortgage property.
• Is probably unable to borrow money or enter into any contract.
This means every member of the club may be held personally liable for any act committed in the name of the club, even those who personally had nothing to do with the act or deed which gave rise to the debt or damage.
An incorporated club:
• Has limited liability, which protects its members from being personally responsible for the debts or deeds of the club.
• Has a separate legal existence.
• Can exercise most powers that are available to individuals.
• Can own property, enter into contracts or mortgages and sue in the courts.
• Can be sued as an entity but only to the extent of its limited liability.
• Can have its interests easily transferred.
• Continues its existence regardless of what happens to individual members.
The nonprofit corporation status is available in most states for “not-for-profit” organizations. This type of incorporation avoids much of the financial burden of other types of incorporation. It’s the type of organization most favored by clubs operated not for profit but seeking protection from club liabilities for individual members.
The IRS and your state tax division may have separate requirements for nonprofit corporations. Become familiar with the requirements of each. Failure to comply with federal and state tax regulations governing your club could result in fines and loss of your corporation status.
To the right is a sample purpose statement for articles of incorporation. You can either use this statement as your purpose statement or as a reference when composing your own:
To promote the motorcycle lifestyle and protect the future of motorcycling; to develop better and more enthusiastic relations between the general public, the media and the operators and riders of motorcycles; to encourage rider participation in events; to encourage discussion among members of matters pertaining to motorcycles; to sponsor and promote organized events; and in general to perform any acts therewith not forbidden by laws of the state of _____________.
After the considerable amount of work you have done to get your organization together, you will want to make sure that you and the other members are going to get the most out of your activities.
The AMA remains the only national organization devoted to providing a full range of services to America’s motorcyclists and is equipped to effectively work for the betterment of all forms of motorcycling. Whether a rider prefers motocross or touring, the AMA exists to keep the fun in motorcycling for everyone.
Your organization will enjoy many services and benefits through its AMA affiliation. A full-time government relations department actively combats all forms of legislation and regulation unfair to motorcyclists. The AMA racing department and AMA recreational riding department both help to organize events.
By chartering your organization with the AMA, your status is acknowledged on the AMA website (www.americanmotorcyclist.com), which can lead to increased membership and exposure.
The Association has gained the respect of legislators and regulators throughout the nation with its government relations work, and this relationship pays dividends. Time and again, the AMA government relations department has helped clubs get public-use permits for organized events.
Sanctioning both recreational and competition events nationwide, the AMA provides a uniform set of rules covering many types of motorcycling activities. With these, members know their abilities will be fairly judged. The popularity of AMA rules is seen in the thousands of events offered each year by AMA organizers.
Also, the AMA is assisted by the AMA Congress. Representatives from AMA districts attend this annual meeting to establish and define rules. Each AMA-chartered promoting organizer has the privilege of voting for Congress delegates, providing a say in how the AMA functions.
Affiliation with the AMA gives your organization direction and focus. Your charter provides immediate benefits and, at the same time, incorporates you into a national community in which your image is enhanced and through which you can better work for your interest, the interests of your community and the interests of motorcycling on a national scale.