Re: Incorporation STUPID MOVE
James H. Moss (JHMoss@LAWYERNET.COM)
Thu, 20 Aug 1998 11:25:35 -0600
WHEN YOU INCORPORATE A BSA UNIT YOU LOSE LIABILITY PROTECTION!
You lose this protection in several ways.
1. You are no longer a non-profit as such you do not avail yourself of the
immunity statutes in each state for volunteers.
2. You are no longer a member of the BSA as such there is an issue as to
whether you have the protection of their insurance policy.
3. You are no longer protected under any policy of the CO. You are no
longer non-profit here also.
Even if you form a non-profit corporation for the unit or the committee you
then lose all protection from the BSA and the CO.
You also then come under the scrutiny of the IRS and any state taxing unit.
As a corporation you must get a tax id number. If you are non-profit, you
have to qualify as such under the IRS regulations. If they do not approve
you, any money or gifts in kind given to the unit are not tax deductible by
If you are for profit, you cannot accept gifts or money donations. You will
also become a liability to the CO.
Speaking of this, how can a CO, adopt another corporation and sponsor a BSA
unit. Legally the board of directors of the CO would have to have 100% (or
at least majority in some states) ownership and control of the unit for one
non-profit to own another corporation. If not, you my mess up the
non-profit tax status of the CO.
Actual expose of a member of the committee is limited. Remember what is
reported on the TV on in the newspaper has nothing to do with real trials
and real law.
The committee member would have to vote with the rest of the committee to
force the unit leader or some other adult to do something that would place a
kid or kids in danger. If requires affirmative acts knowing such acts
created the danger. Sending a kid to Philmont in a car, knowing there could
be a car accident is not enough. Sending a kid to Philmont in a car with a
person who is a know alcoholic and who is drunk at the time gets you there.
Since all adult unit leaders act as volunteers to the CO's Scouting
program, they would be covered by the CO's corporate umbrella.
WRONG!. The new corporation would have to purchase a new insurance policy.
One corporation's insurance policy cannot cover another corporation's
liability. One not incorporated business insurance policy not cover an
incorporated business's policy. This would be like saying your homeowner's
insurance policy cover's your neighbor's house.
If this worked, national would have people telling you about the idea. It
doesn't work and actual creates additional liability.
The only liability insurance policy that would cover the unit would be one
they purchase. Minimum premium for a $1,000,000 policy would be at least
$750.00 per year. That policy would no doubt have a deductible. of 5-10
I know of what I speak.
I spent two years as a DE. I spent six years working for nationwide
insurance. I have spent 13 years as a trial attorney. I have spent the
last five years researching every BSA lawsuit I can find. I just got back
from a meeting with Globe-Pequot Press and McGraw Hill on a book for
volunteer youth leader on liability issues.
Don't incorporate your unit, your committee or any part of the program.
James H. Moss 303-980-5353
Attorney at Law 303-989-2316 Fax
12340 W. Alameda Pkwy. JHMoss@Lawyernet.com
Lakewood, CO 80228-2841
Terry Howerton Sakima Group, Inc. SCOUTER Magazine Kansas City