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I am in the process of forming a leadership team (president, treasurer, fundraising, etc.) for a very small community choir that I am a part of. In order to manage our limited funds, we're trying to open a bank account, and I believe we'll need to open a business checking account. In order to do that, however, we have to file the business with the Oklahoma Secretary of State, and we can't decide which would be the best course of action. The trouble is that we don't want to do a DBA bank account, because that would require the director and/or treasurer to claim any income on their personal tax return. Similarly, we don't want to do an LLC or S Corp, because we don't want a flow-through tax model. The other option would be to file as a C Corp, but the problem with that is that the board will be a rotating group of people, with leadership changing every few years--so how do you decide who is an "owner?" Has anyone in your community encountered this before, and if so, what sort of advice could you give us on how to move forward? Thank you!
Answer:

Thanks for connecting with us at the Community Tool Box. Your question about managing bank accounts varies by many of the issues you have raised. You will need to check with the banking and corporation (C Corp) regulations for your state. In many states "authorized signers" can be changed as the board members change. Considering having at least two authorized signers in case of illness or other absence by one of the signatories. You may have already read the CTB Chapter 43. Managing Finances that provides additional tips and examples. In that chapter, "we have suggested getting help from an accountant or a lawyer when you are going through these processes. But those fees add up; how can a relatively poor organization afford this type of counsel? Our advice is to look for professionals who will either donate their time or do the work at a reduced cost." Consider reviewing the Chapter again for more details. Good luck!

Question Date: Wed, 05/30/2018