I'm preparing to create a non-profit 501(c)(7) social club. First step is incorporation in my state. I know that with a corporation, stock is important because it shows how much of the business people own. Also, when it comes to dispursement of profits, it decides who gets how much. However, do I need to worry about stock in a non-profit corporation? There will be no profits to distribute. But without stock, who "owns" the company?

Is it 'owned' by the board of directors? The incorporator? The membership?

Why are you incorporating? If it's a non profit, you shouldn't need to incorproate the 501(c) designation should protect from liability.

I did some quick checking. 501(c) designation does not protect from liability. If we are an unincorporated association, it does not matter whether we are for profit or not, there is no liability protection.

I got this information from here: http://www.runanzhang.com/en/Corporation-Nonprofit-Foundation-QA.asp

I also found some additional info regarding my specific question at that same website, but it doesn't clearly answer it.


Unlike a regular corporation, a non-profit corporation does not have stockholders (since non-profit corporations do not issue stock). Instead, as an option, non-profit corporations may choose to have members.

A formal membership structure will often grant members certain basic rights, such as the power to vote for directors and the right to approve a sale or merger. Most non-profits (especially smaller ones) do not to have members, due to the additional paperwork and formalities that are required.

Even without members, other people may still participate as an advisor, patron or contributor, but without a formal vote. However, if your non-profit is a club or social organization, it might make sense that all of the members have a formal vote on certain important matters.

OK, But I still don't see incorporation for a socal club. There has to be another way to limit the liability.

Well, I could file as an LLC, but in a non-profit situation, what would be the advantage?

ScottGem, there are other incorporated social clubs in Kentucky, so I'm not sure what the issue is?

I've searched and searched, but still haven't found any more info on this. Anyone else have any idea?