Homebrew Club bank account

[bobberdc]

I've recently become the president of our local homebrew club. One thing our club has never had is a bank account in the club's name. In researching this, the only way we've found to do that is to register with the government as a tax-exempt Social Club so that we have a legal entity for opening the account.

I was curious if other clubs have found a way around this. The other legal requirements for registering will be a royal pain in the butt for us.

Thanks...

 

[Malric]

There are a number of clubs that have gained tax exempt status. It helps when they set up a common brew area and equipment. Probably not what you're looking for, but it can be done.

 

[NervousDad]

I've been part of many types of clubs and this is always an issue.

You can either start a tax exempt, which is a pain and adds a lot expenses. You'll need an accountant (unless you don't mind doing paper work tax returns etc.). It also adds to the complexity of the club. Meetings are spent talking about the bylaws/organizational stuff instead of talking about beer.

The second option is to just keep cash in a lock box, but that usually ends up going missing when a person quits the club or the club disbands. If you do keep cash either split it up or don't let the balance get too high. Two of the clubs I've been involved with ended up losing the money (non beer clubs)

Another option is to get a safety deposit box with two keys, but I'm unsure of the legalities of that.

 

[Pappers_]

I would not serve on the board or as an officer of a homebrew club that was not separately incorporated. Alcohol, liability, etc. Registering as a not-for-profit corporation in Illinois is as easy as falling down. Registering as a IRS 501(c)(3) is a pain in the ass, but completely unnecessary. But the club should be its own legal entity, with insurance.

Once you register as a not-for-profit corporation in the state, you'll be able to open a bank account without any problems.

 

[NervousDad]

I would not serve on the board or as an officer of a homebrew club that was not separately incorporated. Alcohol, liability, etc. Registering as a not-for-profit corporation in Illinois is as easy as falling down. Registering as a IRS 501(c)(3) is a pain in the ass, but completely unnecessary. But the club should be its own legal entity, with insurance.

Once you register as a not-for-profit corporation in the state, you'll be able to open a bank account without any problems.

The insurance is a good point. Especially if you're going to be doing club group brews.

 

[Mongrel]

I've recently become the president of our local homebrew club. One thing our club has never had is a bank account in the club's name. In researching this, the only way we've found to do that is to register with the government as a tax-exempt Social Club so that we have a legal entity for opening the account.

I was curious if other clubs have found a way around this. The other legal requirements for registering will be a royal pain in the butt for us.

Thanks...

Our club finally finished all the steps to get not-for-profit status early this year. It takes a lot of time, but it's well worth getting it done. As an officer, you should really consider it, as you could be potentially be held personally liable for anyone leaving a club meeting. Another great benefit is that it becomes a lot easier to collect donations from breweries, Wyeast, homebrew shops, growler stations, etc. to be used for competition prizes. They don't have to be able to write off the donations, but they like having a tax ID for their paperwork.

I highly recommend you get the process rolling.

 

[duboman]

Trying to cut corners now will only cost you in the long run

If the club being formed is serious about being around and gaining members then push the papers, get an account, handle insurance, etc and in future years you'll be happy the time was taken.

 

[TopherM]

My club is registered as a 501 (c) 7 - Social Club. It cost $60 a year and was about 3 pages of paperwork. The only real big requirement to maintain tax exempt status is that 100% of the money in goes back out to benefit the membership. We do have to maintain books to be able to prove that point in case of an audit. A 501 (c) 7 is not NEARLY as complicated as a 501 (c) 3, but then again donations to our club are also not tax deductable.

Anyway, that's the way to go. Look up 501 (c) 7 and read the IRS documents. They have a summarized version of the overall rules that's about 9 pages long and a pretty easy read.

BTW, we currently have a membership of about 60 members and function on a budget of about $4,000 a year, which we are hoping to increase this year to provide more services for our membership!