National Law
Committee

Each District of USPS should make an independent decision as to whether or not the District should be incorporated. In making such a decision, the following factors would be important:

1. Determine, after reference to the statutes and decisions of the state(s) in which the District operates, whether or not the District is (or should become) an entity separate from National USPS.

Districts hold meetings, have members, obtain membership dues, elect officers, spend funds, execute contracts and invest assets. In most jurisdictions, Districts would be considered distinct from National. A District is generally viewed as unincoporated associations unless it has obtained a corporation charter in one of the states where it operates.

Generally, a group of individuals would not wish to be members of an unincorporated association for various reasons, among them:

1. Many states limit the rights of associations to sue or to be sued.
2. Many states have provisions in common or statutory law that drastically reduce the rights of an association to make contracts and to enforce contractual rights.
3. Members of an association are generally held liable for the acts of the officers and directors of the association which were undertaken on their behalf or with their authority directly given or implied. This includes tort liability; for example, an accident occurring while an officer of the unincorporated association is driving an automobile pursuing association business, or where an officer libels or slanders a third party.

2. Most states have statutes granting substantial immunity to officers and directors of a non-profit, non-stock corporation. Such immunity may not exist for those persons acting on behalf of an unincorporated association. Some states have passed recreational immunity statutes that may grant greater rights to members of an incorporated entity.
   
3. The states have substantial differences in their requirements for the filings with and the authority given to the various Secretary of State offices with regard to "foreign corporations." Where a District which has squadrons (and thus potential members) in two different states, it may be possible to incorporate in the state with the foreign corporation filing requirements and thus avoid filing in the other state which has no such filing requirements. For example, District 10 has squadrons located in Wisconsin and Minnesota. Wisconsin does not require foreign non-profit corporations to register but Minnesota does. Therefore, District 10 may wish to incorporate in Minnesota and thus avoid the necessity of filing as a foreign corporation.
   
4. The disadvantages to incorporation would be three in number:
   
   1. Incorporation is expensive; expect to pay $500 to $1,000 or more for incorporation and filing fees. The District may have a member who will act as the District incorporating attorney at less than the going rate.
   2. Non-profit corporations may require the assistance of a CPA unless there is a knowledgeable treasurer for the District who is willing to assume the corporate accounting issues.
   3. Incorporation often requires annual filing with the Secretary of State's Office in the state of incorporation and other state entities [Attorney General or other monitor of charities; state tax agencies] and would require the obtaining of a federal tax identification number.
5. Steps Toward Incorporation.
   If you decide in favor of incorporation, the following steps should be undertaken:
   
   1. Consult with an attorney in each state where the District has squadrons (potential members) to determine which state would be best for incorporation. A place to start would probably be with the District Legal Officer.
   2. Obtain the services of a knowledgeable attorney who does non-profit incorporations in the chosen state.
   3. Each state has specific requirements with regard to the documents to be filed in order to obtain non-stock, non-profit incorporated status. Generally, the following will be required:
      1. Determine if incorporation is advisable, and if so, have the District conference adopt a resolution in favor of incorporation and authorize the District officers to proceed.
      2. Draft Articles of Incorporation that are to be filed with the Secretary of State's Office of the state of incorporation together with a filing fee of something in the neighborhood of $30 to $100. Usually, the articles need to be signed by one or more persons, acting as the incorporator(s).
      3. Prepare Bylaws for the District. These can be modeled after the District Bylaws provided by National but will require some doctoring to be consistent with the state's incorporation terminology. Generally, the "District Commander" cannot be called that for the purpose of state filings but would be referred to as the "President" or "Chief Excutive Officer".
      4. Submit and obtain approval of the Articles and By-laws from the appropriate National Committees - Law and Rules.
      5. File the Articles with the Secretary of State for the state of incorporation.
      6. Prepare the necessary paperwork for the initial meeting of the members and directors of the incorporated entity. Hold your initial meeting of the members to accept the Articles and Bylaws, ratify the acts of the officers and elect the directors. This would be at District conference after the National approvals are obtained. The District Council members may constitute the "directors."
      7. If the incorporated District intends to operate or formerly operated under the National 501(c)(3) determination, file a "Letter of Authorization" with Headquarters.  This letter must be filed before the end of the 15th month after incorporation.  The letter must be signed by an authorized officer of the District and:
         1. state the full legal name and address of the District
         2. provide the District's Taxpayer Identification Number [TIN]
         3. identify that the District as a corporation
         4. affirmatively state that it is not a "private foundation as defined in Section 509(a)of the Internal Revenue Code"
         5. affirmatively acknowledge that it is a subordinate unit of USPS and subject to the general supervision or control of USPS, and
         6. affirmatively state that it will promptly report to HQ any change in its name, corporate status, purpose, character or method of operation.