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Originally Posted by BayStateRef
You have to make sure you have all the legalities covered.
Maybe. Or not. You really don't.
1) What type of business entity is it really, a true unincorporated association, a sole proprietorship, an LLC, or a corportation. It make a difference on how taxes get filed.
Keep it simple. You really don't need to incorporate in any form.
2)No matter what you will need an EIN from the IRS. Required to file and open bank accounts...
Not true. You can register as a "DBA" (doing business as) with your local government. It's cheap ($10/year here) and it is all you need to get a bank account. A copy of the DBA and your Social Security number is all the bank needs.
3) You will want to make sure all officials are contractors. Get the appropriate forms from them to get SSN's (W-9's I belive) HAve them sign a contract so they understand you will not cover them as employee.
Absolutely not. This is the wrong advice. The officals are not contractors or employees. They are independent contractors. Only if you pay any one of them more than $600 do you need to give them a 1099.
4) Check out your state's workers comp laws some states require each contractor to either have a waiver certificate or carry it..
No. No. No. They are not employees. You do not have to deal with workers comp.
5) Check out you unemployment laws, if you establish something like a corp you may end up filing UI every quarter (at least on your earnings).
Again...bad advice. They are not employees. They are independent contractors. No unemployment to deal with.
6) Depending on the type of entity you may need liability insurance and ensure each official has liability insurance. There are simple ways to do that including charging enough to insure the teams and then you may be able to tack on as an additional insured... If they are all NFHS officials you may be ok, contact their insurance administrators... You can alo insure your organization thru NASO and it it reasonable.. Because my softball group was independent I used Sportsples Operators and Developers )
I am not insured by my association. I am not insured by my assignors. I am an independent contractor. I do not see the need for insurance, but you can talk to your insurance agent about this. You certainly have some liability if you assign an official who does something "horrible." But if you have no assets, then you have no exposure.
You can make this as simple or complicated as you want. As I said...it is just like starting any new business. You decide how much you want to pay up front -- or whether you want to do it much simpler.
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You better check your business laws before telling somone they are getting bad advice. There are legalities. Yes you can do a DBA (sole proprietorship) and the individual is at risk for running the association/business. If the person is looking at some sort of limited liability then they can seek the legal protection of an LLC or a corp.
Even sole proprietorships get EIN's so they dont have to provide SSN's to the contracting organizations. If the City/league whatever pays money they may have to do a 1099 for ain individual is a sole proprietorship
Official's are independent contractors but you are required to get a W-9 or equivalent. They have to provide a SSN (that's what the W-9 is for) if not then you are required to withold money. Even if you pay them less than the $600 threshold for reporting on a 1099.
In Utah and in many other states even though the person is an independent contractor, the contractor is required to provide a certificate that they are exempt as self employed. (Although not enforced much..) I had a municipality and a restaurant group that rquired the exemption certificates or they would not hire us. I never said he had to pay WC on the contractor but may have to have the contarctor provide something
If he decided to incorporate he would have to pay UI on any moneies he paid to a principal.... Once again depends on the business entity created. That's why I said check the UI laws...He doesn not have to pay on independeny contractors but may have to pay on himself depending on organization
Youre right if you have no assets why get insurance. That's why we all have coverage if we register with NFHS. But if they sue the association thinking it is deep pockets... (even if it is not) insurance would be nice to pay the attorney's fees to fight the suit, or pay something so you would not lose the little things like your car or house. I am not losing the equity in my house over a twent dollar basketball game when I could pay insurance premium.
Like I said I had an association that began as a corporation and dealt with each one of the issues above, When it went to one league I dropped the corporation bu still had some of the issues to deal with. Not bad advice been down the road...