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Information provided here is for reference purposes. Your state may be different. Check with local authorities for specifics.

Are your club officers personally liable for law suits against the group? To open a can of worms, the answer is "yes" and "no."

To quell any panic, let me first emphasize that the "yes" is highly unlikely and only would apply to gross negligence on the part of the officers. And, a suit is more unlikely to occur unless the negligence resulted in severe bodily harm -- an improbable happening while participating in a stamp collecting activity. Furthermore, this type of suit falls under most homeowners insurance coverage. My insurance agent advised me that it would require an extreme circumstance for a suit to proceed against one who is serving as a volunteer within a nonprofit organization.

Your club can reinforce the "no" by becoming a Wisconsin Chapter 181 corporation, which is for non-stock and not-for-profit organizations. Theoretically, if your club is incorporated, your officers are a part of the corporation, and a claim can be made only for assets of the corporation. I use the word "theoretically," however, because I've yet to find a legal counsel who will confirm that an aggressive attorney absolutely cannot break through the corporation to go after the assets of an individual. Still, the overwhelming legal advise is to incorporate.

Incorporation procedures differ from state to state. Fortunately, in Wisconsin, it's simple and does not require legal assistance. All you have to do is file Chapter 181 Form 102, titled "Articles of Incorporation."

Two fees are involved when filing for incorporation: $35 to the Secretary of State, and a minimum $16 to the Register of Deeds. The $16 fee goes up if you append pages to the three-page Form 102, which normally is not necessary for a local stamp club.

All Wisconsin Chapter 181 corporations are required to submit a one page, fill-in-the-blanks Annual Report form accompanied with a $10 check. This report form is routinely sent each year to the person you designate to serve as your corporation's Registered Agent. Failure to submit the Annual Report will result in the automatic dissolution of your corporation. Although there is a two-year grace period before dissolution, there also is a stiff penalty fee for not filing your Annual Report by the prescribed deadline date.

The point here is that if you want to maintain your corporation status without paying undue fees, you need to name a dependable club member to serve as Registered Agent. The Annual Report form allows you to change your Registered Agent. It also allows you to change those appointed to serve as your corporation's Board of Directors. Standard procedure is to list your club officers as your Board of Directors.

Note, you do not have to be incorporated to be eligible for tax-exempt status under Internal Revenue Code section 501(c)(7) and vice versa. You do need to be incorporated for 501(c)(3) status.