Re: MCM - Digest V1 #206

["Dorothy Reimer" <dreimer@wwdc.com>]

-----Original Message-----
From: MCM - Digest <owner-aga-mcm-digest@thekrib.com>
To: aga-mcm-digest@thekrib.com <aga-mcm-digest@thekrib.com>
Date: Monday, January 10, 2000 7:11 AM
Subject: MCM - Digest V1 #206


>
>MCM - Digest         Monday, January 10 2000         Volume 01 : Number 206
>
>
>
>In this issue:
>
>   Re: MCM - Digest V1 #201
>
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>----------------------------------------------------------------------
>
>Date: Sun, 9 Jan 2000 13:29:55 -0500
>From: "Robert P. Cashin" <rcashin@juno.com>
>Subject: Re: MCM - Digest V1 #201
>
>Hi Everybody,
>
> There is a lot to discuss today. First, I want to thank Diana Walstad
>for volunteering to take the poster/book sales from Gomberg. I have
>emailed Dave reminding him to send the inventory to her. She has also
>accepted a position as a member of the MC. Welcome aboard Diana, we look
>forward to hearing your opinions  in our discussions. The SC has decided
>to sell her book in addition to the others we currently offer.
>
> Next, I want to thank Bob M for his inputs on incorporation. I have been
>waiting for this to go on to the next phase, which is the by-laws,
>constitution, etc.
>
>>Mary tells me that the AGA is strongly inclined to become a nonprofit
>>organization.  Before going through the necessary steps, however, I
>>think it is a good idea clarify what becoming a nonprofit corporation
>>will (and will not) accomplish, and how much it will cost.
>>
>>As a nonprofit corporation, the AGA will be able to engage in
>>profit-making activities without paying federal or state income tax.
>>The AGA may also enjoy other benefits:
>>* The AGA will have a formal structure with directors, officers and
>>by-laws.  This structure may be beneficial to the organization.
>>* The AGA may qualify for lower postal rates.
>>* As a corporation, the individual members of the AGA will be
>>protected if the AGA is sued.
>>* The AGA can receive donations on a tax-deductible basis.
>>>Note:  the AGA will not necessarily be exempt from collecting state
>>sales - state law varies depending where goods are sold.  Furthermore,
>>dues will not necessarily be tax-deductible.
>
> These are all things that will help the organization. I am particularly
>interested in protection of the individual members from liability.
>>
>>It will require money and effort to form the organization and comply
>>with annual reporting requirements.  Here is what is required:
>>
>>* The AGA will become a nonprofit corporation in some state.  In
>>Massachusetts, this involves filing some simple paperwork and paying a
>>$35 fee.
>
> Does anyone have any objection to Mass. being the state in which we get
>incorporated? If not, lets set it up that way as I suspect it will make
>Bob's job easier living in that state too.
>
>>* The AGA will file a form with the IRS asking for tax-exempt ("=A7
>>501(c)(3)") status.  The IRS charges a $150 user fee, $300 if the
>>receipts of the AGA are over certain thresholds.  The purpose of the
>>filing is to demonstrate to the IRS that the AGA's purposes merit a tax
>>exemption.  Generally, it takes the IRS between two and six months to
>>rule on the request.
>>* The AGA will file some additional paperwork to qualify for state tax
>>exemptions.  Several forms must be filed in Massachusetts if the AGA
>>incorporates here.  Additionally, it may be a good idea to file for
>>sales tax exemption if the AGA regularly sells goods in other states.
>
> Do we have to have the federal status in order to get it from the state
>or can they proceed concurrently?
>
>>* Annual filings will probably be required with the state of
>>incorporation and the federal government.  In Massachusetts, a simple
>>annual report must be filed together with a $15 fee.  A federal report
>>Form 990 - is required if the AGA's gross receipts for the year exceed
>>$25,000.  The AGA will need to hire an accountant to prepare this form
>>if it is required.
>>
>>I will not charge the AGA for handling the paperwork except to the
>>extent I incur out-of-pocket expenses, which should not exceed $50.
>>In total, it should cost the AGA between $200 and $500 to become a
>>nonprofit organization.    On an ongoing basis, the AGA will probably
>>have to pay an accountant to prepare annual financial statements and
>>tax returns.  I work with an accountant who generally charges about
>>$250-$300 per year for this type of work.  All these figures are based
>>on incorporation in Massachusetts, and may differ somewhat if the AGA
>>incorporates elsewhere.
>
> The expenses should not be a problem. Last year we voted to allot $1000
>for this effort.
>>
>>If you are interested in incorporating the AGA, here is what I will need
>
>>to go forward:
>>
>>* I will need to speak with someone regarding the management structure
>>of the AGA.  The Articles of Incorporation and corporate By-laws will
>>contain a number of details concerning management, such as the initial
>>officers and Board of Directors of the AGA, their terms of office, and
>>their powers.  These matters will need to be decided before the AGA is
>>incorporated.
>
> I guess I should be the contact for this with the rest of the
>
>>* I will need to speak with someone who can supply me with financial
>>data for the past few years.  The nature of the AGA's finances will
>>affect the amount of the AGA's filing fee with the IRS and the extent
>>of its ongoing reporting obligations.
>
> David Lass has this info. Please see him for it.
>
>>* The AGA will need to prepare a "mission statement."  This statement
>>is important in order to convince the IRS that the AGA is worthy of a
>tax
>>exemption.
>
> How does this differ from the Purpose listed on the inside front cover
>of TAG, or does it differ?
>
> We definitely want to proceed.
>
> Mary, thanks for getting the ads in the national magazines.
>
> I think that is it for now, Bob C
>
I have no objections to AGA being incorporated in Mass. Many thanks to Bob M
for helping us in this situation. We have been trying for some time to get
this in motion and I hope it will go ahead now.

Dorothy
>
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>End of MCM - Digest V1 #206
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>