Whew, thanks for the info. To address your specific question about why incorporate? I guess in our case, it did two things for us. 1. It allowed us to be a "new" organization when we applied for 501c3 which gave us a very clean starting point with the IRS 2. It does give us some measure of liability protection, even if it's not as rock solid as we'd like. Our annual fee is about $20, so it's a small price to pay for some level of protection. I guess we should reinvestigate the insurance issue, just to be sure we're making really informed decisions. I'm putting www.ptolaw.com on my favorites.

Critter & Phil,

Here is what I found on PTOLaw.com


"Can the PTO be sued?

Perhaps the most common question I'm asked is, "Can we be sued for that?" Unfortunately the answer is, anyone can sue anyone for anything…and someone probably will. And, whether or not the PTO or its officers, directors and members are liable, the cost of defending any legal action can be high. Therefore it is recommended that all PTOs develop at least a simple risk management plan and take steps to reduce the group's legal risks. See PTOs, Risks and Insurance on this website for more information on developing a risk management plans.


Can the officers/directors/volunteers of the PTO be sued?

See #5 above - unfortunately anyone can be sued at anytime and the cost of defending yourself, regardless of ultimate liability, can be quite high. Officers and directors are less vulnerable if the PTO is a separately incorporated nonprofit organization. The corporate forms generally insulates the officers and directors from most liability. Even if a PTO is incorporated, however, I recommend that the PTO develop a risk management plan, including (but not limited to) obtaining officer and director liability insurance. "


Which would seem to answer the ? can the directors/officers be sued. BUt then the other question arises - why would we want to incorp. and not just have the 501(c)(3) and extra insurance?

Hmmmmm...anyone else more confused now?

Thanks all - again!

I think we are going to do exactly what you suggested and present it to the membership. We feel we are being responsible.

I am of the opinion that if this takes this much consideration and we are uncomfortable with the language of several of the documents, that we need to say no thank you at this time.

We are still weighing the pros/cons of incorporation ourselves.

Anyone who has incorporated - do you send out annual meeting notices with proxys? If you are not incorporated do you do that anyway when you have elections?

Thanks for all the help - I do appreciated it!!

I hope someone can answer Critter question because I am getting a little uneasy here too.

REALMom,

I am still very leery of what the School Board is trying to do. You are already an independent organization (and approved by the IRS as a Non-Profit connected with the school). I assume you membership is limited to people connected with the school. IMHO, you are not a "rogue" organization, you are an established, well-known and functioning group connected to the school.

I think you do an option to join or not to join. I think you - and your board - have a fiduciary responsibility to analyse the pros and cons and make a recommendation to your membership. The membership has a responsibility to weigh the information and vote one way or the other. If it is to join - so be it. But if it is to remain as you are then that is clearly what should be done - regardless of the pressure being put on you by the school board.

BTW - if you and all the other PTOs are under the school boards control, there is nothing stopping them from re-allocated in the money raised from one PTO to another. How would your parents feel if the money they worked so hard to raise is given to the school "on the other side of the tracks" that wasn't able to raise as much? I guarantee you they wouldn't work so hard next year.

Keep fighting the good fight.

Anyone give us a definitive clarification on this? I don't want to be operating under a false sense of security.

Critter,

I understand the key benefit of incorporation is the protection it provides your indivdual officers. For example, if your corporation is sued, only the assets of the corporation are at risk, not those of your officers.

I'm not a lawyer, but I don't believe that's quite correct. A person can sue the corporation anad the individuals. It doesn't mean the courts actually will allow it, but that can be after big $$ in lawyer fees to extricate the individual from the suit.

Let's just say it affords some measure of protection from being sued.