James H. Moss (JHMoss@LAWYERNET.COM)
Mon, 24 Aug 1998 15:56:45 -0600
I want to jump in here and comment on the differences between the Little
League Baseball program and the BSA and why different approaches are best
for each one.
>> [Sheehan] Not so. There are all kinds of ramifications these days if
you are a member of a corporation and did not blow the whistle or stop
certain actions. You could be found negligent or even liable anyway. I
don't think so, I know that incorporation is a BAD idea. The ability to
nestle under the umbrella of the chartered organization is gone, and will
be a royal pain. How would you organize as a 503 or an S Corp? <<
[Ballenger] It would be a 501(c)(3) corporation. Here is what the
Little League Baseball 1997 Operating Manual says on the subject of
incorporation of local leagues:
>>One important step that should be considered by every league
presently operating is incorporation.<< For Little League, yes, BSA No.
>>Incorporation of a local league will give a degree of permanency
and stability otherwise lacking. Yes
Members of the public who contribute to
local leagues will naturally desire to deduct the amount as charitable
contribution for income tax purposes. With the BSA most contributions can
be given to the Chartered Organization and use their non-profit status for
the BSA. Also, this really only becomes important when contributions are
being made in the amount that requires itemization for deductions.
While the Internal Revenue
Department does not require a "charitable" organization to take any
particular legal form, the fact of incorporation will help to show the
non-profit nature of the local league. Write to Headquarters for bulletins
on tax exemption.<< This is correct. The real difference is the IRS does
not like to give charitable status to any association. It is ten times
easier to get charitable status as a corp.
>>A corporation is a convenient means of holding title to any real or
personal property which the league may own. In most states this is true.
Like the discussion about Troop trailers for the BSA you should title the
trailer in the chartered organization name. Title to real property is
basically real estate (land), automobiles, stocks, bonds etc. Those thing
were you are given a piece of paper other than a receipt showing you own the
product. Most troop gear outside of the occasional trailer is not titled
property. As such, the "troop" can own the gear with out consequence or
In the absence of
incorporation, property must be held in the names of individuals. Over a
period of time, this may present serious problems by reason of death,
withdrawal from participation or absence. On the other hand, title vested
in a corporation remains unaffected despite the change in managing
>>As a general rule, incorporation relieves the officers and managers
of personal liability for damages as a result of injuries to spectators,
etc. Those individuals who are personally and directly responsible for the
injury may, however, remain liable.<< Correct.
The major difference is the Little League presents a program to people. The
people help kids play baseball. Incorporating protects those people in the
community from encountering numerous problems.
In the BSA, the Chartered organization normally and in the vast majority of
cases serves this function. The exception is those units chartered by
"Friends of Scouting," when no other chartered organization is available.
The umbrella of protection from the IRS and lawsuits is much greater through
a regular chartered organization such as a church than if the unit
incorporated. Incorporation moves the unit out from under the umbrella of
the CO and as such they must build their own umbrella. Tax status, Tax ID
numbers, charitable identification and tax returns must then be filed.
Insurance polices covering liability of the corporation and the unit must
also be purchased.
Yours in Scouting
12340 W. Alameda Pkwy., Lakewood, CO 80228-2841
Eagle Class of 69, Vigil, Denver Area Council
Terry Howerton Sakima Group, Inc. SCOUTER Magazine Kansas City