To Incorporate Or Not Incorporate
George Fernett wrote.........
 Lately, we have been hearing that we should "incorporate" our club, to protect each individual from any problems (lawsuits, etc) that might occur for whatever reason.
Most clubs form as partnerships since the potential risk of liability is very small.   Unless a club borrows or uses margin, the potential risk usually revolves around, and is limited to, the slight possibility of personal injury related to an accident at the location of the meeting. Therefore,  the high costs associated with incorporation usually far outweighs the slight risk of a partnership form of organization.     Also, if your club is a member of the National Association of Investors Corp. (NAIC) your club (partnership) is automatically covered by liability insurance.   Check the NAIC web site at for more details.
 Also, we were told that when we file our taxes next year and every year after, each member would have to file their own forms relating to the club even if they did not take any sort of distribution, along with the club filing its own.
Except in very limited circumstances, a partnership must file a partnership tax return each year.  This return, including Form 1065, K-1's, and associated schedules is simply an informational return since all taxable items and expenses pass through the partnership to the individual partners.   This return includes the amount of income, expenses, and gains/losses realized by the club during the year and the share of each allocated to each member.   A copy of the K-1 is given to each member so that they can report the applicable items on their individual tax return.
Thanks for using bivio!
Jerry Dressel
St.Louis, Missouri