New Club Finances
Before the demonstration meeting you should decide how to handle any money
collected from the prospective club. You or an elected club officer may
begin to collect payment for dues and fees from the club's prospective
members during or soon after the club's first meeting. Many clubs choose
at this stage to open a checking account.
In many countries (including the United States) it is necessary that the
club register as a not-for-profit association before an account may be
opened. The officers of the new club should check with local banks to see
what type of documentation is required.
See Appendix C, Part E of
this manual for instructions on how to apply register as a not-for-profit association.
In many cases it is possible to obtain an Employer Identification Number
(EIN) quickly by telephone or fax. If the club prefers, World Headquarters
can be designated as the club's proxy and will apply for the number on
behalf of the club. Without the EIN the club will not be able to open its
own bank account. An EIN is simply a type of tax identification number
and does not imply that a club would ever or could ever have employees.
United States tax law requires that all clubs meeting in the United States
have an EIN number. Ensure that World Headquarters is provided with the
EIN as soon as practical after it is received. The number will be maintained
in the club's permanent records. Each year World Headquarters is required
to submit a summary of all clubs in the United States along with their
EIN numbers to the IRS.
If a club has collected payments from its prospective members but does
not have a bank account of its own, it may, at its own discretion:
- Designate a club officer to:
- Hold the payments until the club has opened an account
- Hold the payments until they are sent to Toastmasters International
- With the agreement of another local club deposit the payment into that
club's account for payment of the new club's expenses