Forming a club // Profiting from said club

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Zona

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I am considering forming a club in Colorado and I have several questions. I have not been able to locate information on the legal definition of a club, and how they differ from any other corporation. Is the formation of a corporation and a club essentially the same thing?

I am forming this club with the profit motive in mind. While I will be providing services for club members, they will be charged for it, and not at cost. I am wondering, how does one take these profits? Can the profits simply be given to share holders as a dividend or must the profits be paid out in salaries? Thank you for any assistance and please let me know if I need to clarify anything further.
 
A club is just an organization. A corporation is a specific type of legal entity governed by statute and whose owners are protected by limited liability. Some clubs are incorporated, and some corporations might have a clubby feel to them, but they are very different things. If you're going to have shareholders, you're probably looking at forming a corporation.

Revenue accrues to the corporation, and it can disburse monies to shareholders or to employees in any way it sees fit in accordance with its bylaws and Colorado's laws governing corporations. It can pay its employees a salary, it can distribute profits to shareholders as a dividend. It all depends on how you want to do things.

If you are thinking of incorporating in Colorado, you should really see a Colorado lawyer.
 
I do have plans to locate and speak to a lawyer in Colorado as I get farther in the process. I'm guessing that I will need to incorporate. It is going to be a social club. I am assuming that I can do whatever I wish with the club fees? I think I am just kind of confused with the designation as a club, does it really not mean anything?
For example, I do not have to offer representation in club leadership/direction to club members correct?
 
When you say "designation as a club", what are you referring to? Self-designation? Designation in some official capacity? As far as I know, a "club" is just any organization of like-minded people. Bridge clubs, book clubs, social clubs. A club is not necessarily any kind of legal entity. Some clubs choose to incorporate so they can have the advantages of corporations, and then they become legal entities. Many don't.

Some jurisdictions have archaic laws about the formation of "assocations" or something like that - things on a different legal plane than mere congregations of people, but that are not quite corporations. I don't know if Colorado has those. They're no longer in common use.

If by "do whatever you wish with club fees", you're asking whether you can charge members whatever you like, the answer is pretty much "yes". It's a free market, baby. If you're asking whether you can spend the money you get from them however you like, the answer is not so simple. You may be restricted by Colorado's corporate law, by your own bylaws, by employment standards legislation, etc.
 
Thank you so much for your help. What sort of lawyer will I need to set this up and make sure everything is legit? Sorry I am pretty inexperienced when it comes to using the services of a lawyer.
 
You're looking for a business or corporate lawyer. You should also consult the state of Colorado's website - it has a wealth of useful information for a prospective business owner.
 
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