Incorporating a Business Association is very much similar to forming a Corporation, except that in Business Association you can have the advantage of applying for tax exempt status, which requires a little bit more paperwork and applying for the proper permits from authorities.
Before starting the incorporating process you need to take the following steps:
· Recruit the founding members and secure the start-up funds
· Get the necessary formal commitments from founders
· Develop all proposed member benefits and the mission statement
· Define and create the governing structure for the organization
· Create a framework for your Association
· Form an executive committee (steering committee)
After preparing the above mentioned materials, it is preferable to hire an Association Management Company to start-up the launch. Association Management Companies specialize in providing management services for Associations on a fee basis. Regardless of the Business Association’s nature, sector, size or even location, they can provide support, technology and even space and equipment for the smooth operation of Associations. They provide their services to a number of Associations and with the levels of experience they offer, can ensure the smooth operation of your Business Association. However, this task may also be performed by the Association officers, who may handle the task, depending on their experience level.
Incorporate as a Business Association
In order to incorporate as Business Association, here is what you need to do:
1. Choose a name: Choose an appropriate available name for your Business Association that meets the requirement of your country’s law and also indicate the nature of its existence. Remember in some countries, the use of certain words is prohibited and the name cannot be the same as other company or organization. You should also make sure that the name will not violate any trademarks.
2. Appoint Directors: Usually when you are filling out necessary documents for incorporation, you should list the name of directors.
3. Filing Documents: File the required paperwork and articles of incorporation, according to the regulations of your country, to the official bodies. Articles of incorporation contain basic structural information about your Business Association such as name, registered office address and so on. Usually this process will incur a small fee.
4. Tax Exemption: If applicable, apply for tax exemptions and include all tax exempt purposes and all other essential information.
5. Create Bylaws: This is a very important task as there are many benefits that may be received from investing additional time, effort, thought and research in the creation of the bylaws. It may be wise to consult with an attorney, to ensure these are written correctly to avoid any future issues. In some countries you are not required to produce bylaws for Associations. However, it could be advantages to do so anyway, as bylaws will set the rules of conduct, authority and procedures for directors and officers in your Business Association. Complete understanding of these rules by the officers will make the operation of your organization much easier. You may find free versions of articles of Association on internet (in some countries authorities will provide you a standard copy) and you can change it according to your needs. Remember you can change it anytime according to your needs!
6. First Board of Directors Meeting: The first order for almost every new incorporated organization is to hold a meeting to approve the necessary standard items for operations. Whoever signed and filed the articles on behalf of the Business Association will hold the meeting. Items to be discussed in this meeting usually are accounting period, tax year, approving bylaws, issuance of memberships, certificates, membership dues, establishing specialized committees, appointing officers, approving transactions, opening bank accounts and tax exemption terms. It is advantageous to keep minutes of the first meeting as well as any other meetings in your records.