From: "Rick Moen" <rick@linuxmafia.com>
Quoting Petros (Petros.Listig@fdrive.com.au):
I guess the reason for a legal entity is to simplify or enable:
Gosh, I've been through all this before.
1. Insurance
Easy to say without pricing it. I'm guessing that if you ever did, you'd find that general liabiity insurance for a non-profit association would be (1) so very prohibitively and astoundingly expensive in annual premiums that you would give up on the idea, and (2) narrowly written to cover only the directors and enumerated key officers in the performance of their delineated duties. If you imagined that it would automagically cover all activities of volunteers in the organisation, you would be sadly mistaken.
Maybe I should have broadened it with "reliability issues" (e.g. if I step on your foot when you carry a beamer and sue me for 1 Mio Dollars). I make that up because I know that you are always insured for everything but the thing that just occurred. Maybe insurance should be banned as a criminal activity;-) Anyway, for the ski club mentioned the insurance premium is a significant expense but it makes people being involved feeling safer. So far the insurance has a significant impact in this regard.
2. Sponsoring 3. Hiring of venues etc. 4. A public voice 5. A president to blame;-)
None of those is particularly improved by incorporation. (If you believe otherwise, please state the grounds for your belief.)
Okay, maybe 1 to 4 are valid. What else?
Near as I can tell, not a single one of them is.
Well, is there any reason for incorporation? Please let me know. Thanks Peter