"What is your Corporation Status?"

The decision on whether to incorporate should be made by each state by weighing its own level of activities and potential exposure against the cost of such incorporation. Since corporation laws and costs vary from state to state, it is suggested that any association seeking incorporation contact a local attorney for help.

Unincorporated associations and their members can be liable for: a) contracts made by officers or members on behalf of the association, b) negligent or unintentional tortuous acts committed by members in furtherance of association business, and c) debts incurred on behalf of the association.

The incorporating of a non-profit organization such as a state association is a relatively simple and inexpensive procedure in most states. In addition, the filing fees and other expenses for maintaining such a non-profit corporation are usually substantially less than a profit-making corporation.

Naturally, each state has its own rules, regulations, and filing fees regarding incorporating non-profit corporations, but it is accurate to state that the benefits of such incorporation in most cases will outweigh any cost or inconvenience incurred in so doing, especially when balanced against the potential liability faced by an unincorporated association.

"What is your Corporation Status?" [PDF]