The legal requirements to form and carry out the activities usually associated with a youth sports organization can be involved. However, if you start out by doing the proper research and retaining counsel early on, your group can avoid confusion and delay in getting up and running.
1
Determine the proper type of entity for your youth sports organization.
The most common type of entity for a youth sports organization is a not for profit corporation. Other possible entities are LLC's or unincorporated associations. However, the cost to form a not for profit corporation are fairly low, and the process can be quite simple. In some states like Colorado, you can use online forms on the department of state web site to file your articles of incorporation online, and the filing fee is $50.00. You will need to have determined the name of the entity, the physical and mailing address for the corporation, and the individuals responsible for forming the corporation and who will be able to accept legal service for the corporation. However, before you file, you must look forward as to the goals of the organization and address the need to be tax exempt.
2
Determining the exempt purpose(s).
In the likely event that you will seek tax exempt status from the IRS you will also need to include special provisions setting forth that you are organized to fulfill and exempt purpose, and an acceptable dissolution provision. To become tax exempt you must file IRS form 1023 which is available online at the IRS web site. (Go to irs.gov - under the Charities & Non-Profits tab). Youth sports organizations can typically qualify on any one or more of three approved basis. You can apply based upon section 501(c)(3) charitable and educational purposes, as well as under the basis of an amateur athletic organization. However, all your purposes must be for acceptable tax exempt basis. The IRS web site also contains links to instructions in completing form 1023 and describes the requirements for each of these basis to obtain tax exempt status. This is a time consuming technical application, and should be done with the help of a lawyer.
3
More planning ahead for Form 1023.
You should complete a draft of form 1023 before you file your corporate formation documents. Then, once the entity is formed, with the proper tax exempt purpose and dissolution provisions, you will obtain and attach a signed copy or certified copy of an unsigned electronically filed version of the Articles of Incorporation to the tax exempt application.
4
Hold an Organizational Meeting of the Corporation.
You will then need to hold an organizational meeting to elect the initial Board of Directors of the corporation. Try to include people who are leaders, and who have competitive and coaching athletic experience beyond being a parent; those that are representative of the group, and who are supportive of its purpose; people who are like mined and hard working; and people who can get along and work well with others.
5
Adopt the Corporate Bylaws.
Once the Directors are elected they need to have a committee work on the bylaws. Then, hold a special meeting to adopt a set of bylaws. The bylaws will set forth the corporate purposes in more detail than the vague Articles of Incorporation, since the bylaws can be changed more easily in the future. The purposes in the bylaws need to correspond to the purposes and activities set forth in Part IV of the tax exempt application. The bylaws also set forth the regular meeting times, the procedures for electing officers, and the general operating rules for the organization. Those rules should include the signors required and approved to carry out the organizations banking. A copy of the adopted Bylaws along with proof they were adopted by resolution of the Board of Directors also needs to be attached to the tax exempt application per Part II (5) of Form 1023.
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