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Organizing UICI™'s Corporate

Structures In The Black Community


The Opportunity African American Women Have Been Waiting For
New Age Capitalism & New Age Corporations
Now You Can Lead The Way To The Future

Report on Clubs,

Organization, Structure & Legal Requirements

I.          Clubs   [Note: Boldness, Italics and/or Underlining are for emphasis and may not be in the original document; however it will be done throughout this report.]


A.        Legal Definition from the Free Dictionary Online:


1.        A club is defined in pertinent parts as; “[A]n organization composed of people who voluntarily meet on a regular basis for a mutual purpose other than educational, religious, charitable, or financial pursuits. A club is any kind of group that has members who meet for a social, literary, or political purpose, such as health clubs, country clubs, book clubs, and women's associations. The term club is not a legal term per se, but a group that organizes itself as a club must comply with any laws governing its organization  and otherwise be  cognizant of the legal ramifications in undertaking to organize itself in this manner.


B.        Types of Clubs:


2.         Various types of clubs exist. An incorporated members' club is composed of a group of individuals who each contribute to the club's funds, which are used to pay the expenses of conducting the society. An unincorporated proprietary club is one whose proprietor owns the property and funds and conducts the club to attempt to make a profit. The members are entitled to use the premises and property in exchange for the payment of entrance fees and subscriptions to the proprietor as well as any additional rights and privileges provided in their contractual agreement.


3.         An incorporated club is generally governed by state statute. Many statutes provide for the incorporation of clubs, and the statutory requirements must be strictly observed. A statute may require  that an application for incorporation  state the  purposes  of the  club in a  definitive manner to help the court determine whether the objective of the club is legal. In addition, the application should state the manner in which club revenues are to be provided and the basis upon which an individual may become a member of the club.


C.        Organizational Structure:


4.         A club's certificate of incorporation should indicate pecuniary means (i.e., funds, money, property), describe the objective of the club, and specify a place of business or office. If a club is unincorporated, the rules that govern associations apply.


5.         Voluntary clubs are not partnerships, since the members do not join them for profit-making purposes and, unlike partners, are not responsible for the acts of each other. If a club's members do unite for a commercial venture, however, this association would constitute a partnership. In such cases, a club might be required to comply with state law governing partnerships.


D.        Purpose and Objective:


6.         The purpose and objective of a club must be in compliance with the law and in the best interests of the community, whether a club is incorporated or not. An application for a club charter will be denied if the proposed bylaws provide for illegal methods of management.


7.         The Police Power of the state encompasses the supervision of amusements and thereby regulates clubs to make sure that the objectives of these organizations are lawful and that the organizations do not become harmful to society. Statutes may authorize the revocation of a club's charter if the club conducts unlawful activities.


E.        Constitution and Bylaws:


8.         The constitution and bylaws adopted by a club constitute a binding contract between the club and its members. There is a presumption that every member of the club is acquainted with its rules. The rules and bylaws of a club must provide for the selection of officers, handling of money or property, selection of members, and dissolution or disbanding of the club itself.


9.         A club's rights and powers are usually governed by applicable statutes and the club's own charter, constitution, and bylaws. Clubs ordinarily have the power to acquire and convey real property, to hold real estate, and to obtain suitable buildings for their accommodation, as well as to borrow money for such purposes.


10.       Private clubs have the right to Immunity from public interference. Public authorities  have no  power to interfere with a private club's activities when they are organized for a legitimate purpose and do not violate any lawfully enacted statute.


F.         Liabilities:


11.       If a contract is made by a club's duly authorized agent on its behalf, then the club will be liable under the contract. A membership corporation is subject to strictly limited powers and well-defined methods of procedure, and anyone dealing with such a club is deemed to know this information. Unincorporated clubs are not liable for members' debts.


12.       Concerning liability to its members for torts, an incorporated club that has a clubhouse and is financed by membership dues is financially responsible for injuries due to its Negligence. Similarly, a club, whether incorporated or not, that maintains a clubhouse has a duty to keep the premises reasonably safe for its members. It also has a duty to inform and warn guests of all dangers related to the enjoyment of club privileges, that are not immediately observable.


13.       A club may have various responsibilities to nonmembers. For example, a hunting club may be required to carry insurance in case of an accidental injury within its boundaries. Similarly, a club owes invitees on club property the duty to exercise ordinary care to prevent them from being injured.


G.        Protecting Civil Rights:


14.       Almost every organization that provides food, drink, lodging, or entertainment must obey the federal Civil Rights laws and any applicable state statutes. The federal laws are designed to protect all people from interference with their right to get a job or education, participate in government, and enjoy public accommodations.


15.       Private membership clubs are exempted from these civil rights laws in order to preserve their rights to privacy and freedom of association. In attempting to determine whether an organization genuinely deserves private club status, courts have considered a number of factors, including the club's criteria for admission, membership fees, membership control over the organization's operations, and use of facilities by nonmembers. Because the courts have applied these factors on a....case-by-case basis..., the results have been inconsistent. For example, recreational sports clubs such as golf,  tennis, fishing and hunting,  private dining, and swimming clubs have generally been found to provide public accommodations. Fraternal orders and lodges have proven to be more difficult to categorize.


16.       In four decisions dealing with these types of organizations, the Supreme Court narrowed  the  definition of  freedom of association  and upheld the  constitutionality of state statutes designed to keep private clubs from discriminating.


A.        The Jaycees: In the first case, Roberts v. United States Jaycees, 468 U.S. 609, 104 S. Ct. 3244, 82 L. Ed. 2d 462 (1984), the Supreme Court addressed the constitutionality of a state public accommodations law that had been applied to a private club. The club, the U.S. Jaycees, a major national and international civic organization, had been ordered by the Minnesota Department of Human Rights to accept women as full members. The Court rejected the Jaycees' argument that this order violated its constitutional rights. In its decision, the Court identified two distinct types of protected associations: intimate associations and expressive associations.


1.         According to the Court, intimate associations, such as families, are distinguished by "relative smallness, a high degree of selectivity in decisions to begin and maintain the affiliation, and seclusion from others in critical aspects of the relationship." Such associations are always subject to protection, the Court said, whereas large business enterprises are not. Private clubs such as the Jaycees fall somewhere in between the two. According to the Court, factors that may be relevant in determining whether a particular organization is an intimate association include "size, purpose, policies, selectivity, [and] congeniality.


2.         The Court concluded that the Jaycees is not subject to protection as an intimate association because its chapters are large and unselective. With regard to the Jaycees' rights as an expressive association, the Court acknowledged that the organization has the right to associate with others for political, social, economic, educational, religious, and cultural purposes. However, the Court held that this right may be infringed by compelling state interests such as the desire to eliminate Sex Discrimination. The Court concluded that Minnesota had such a compelling interest in ensuring women equal access to the leadership skills, business contacts, and employment promotions offered by the Jaycees.


B.        Rotary Clubs: Three years after Roberts, the U.S. Supreme Court decided Board of Directors v. Rotary Club, 481 U.S. 537, 107 S. Ct. 1940, 95 L. Ed. 2d 474 (1987). This case involved the application of the Unruh civil rights act (Cal. Civ. Code 51 [West 1996]), a California statute that prohibits gender discrimination by all "business establishments," to Rotary clubs. The Rotary is a major national and interna-tional service club. The Supreme Court held that application of the act to require the Rotary to admit women as members did not violate the club's First Amendment right to intimate  or  expressive association. The Court pointed out,  that  Rotary chapters  range in size from 20 to more than nine hundred members, the organization has a high dropout rate, and many club activities are carried out in the presence of visitors. In finding that application of the Unruh Act would not interfere significantly with the Rotary's right to expressive association, the Court stated, "Indeed, by opening membership to leading business and professional women in the community, Rotary Clubs are likely to obtain a more representative cross section of community leaders with a broadened capacity for service."


C.        New York Clubs: In 1988, in New York State Club Ass'n v. City of New York, 487 U.S. 1, 108 S. Ct. 2225, 101 L. Ed. 2d 1 (1988), an association of 125 private clubs challenged the constitutionality of a New York City public accommodations ordinance that prevents discrimination. The ordinance, Local Law No. 63 of 1984, exempts clubs that are "distinctly private" in nature, specifically excluding from that status any club that has more than four hundred members, serves meals on a regular basis, and receives payments directly or indirectly from nonmembers in the pursuit of business. The Court rejected the clubs' challenge to the ordinance, finding that the law could be validly applied.


1.         In this case, the Court went beyond its decisions in Roberts and Rotary by approving a statutory presumption that large clubs that serve food and receive payments from nonmembers are not entitled to First Amendment protection. The Court emphasized the fact that significant commerce occurs at most of the clubs and that "business deals are often made and personal contacts valuable for business purposes, employment and professional advancement are formed." Such characteristics, according to the Court, are significant in determining the nonprivate nature of clubs.


2.         The law upheld by the Court in this case narrowed the definition of a private club in order to remedy a situation deemed inappropriate by a legislative body.


D.        Boy Scouts of America The Supreme Court clarified its position on the reach of civil rights laws in Boys Scouts of America v. Dale, 530 U.S. 640, 120 S.Ct. 2446, 147 L.Ed.2d 554 (2000). The Court, in a 5–4 decision, held that forcing the Boy Scouts of America (BSA) to accept gay troop leaders would violate its rights of free expression and free association under the First Amendment. The BSA is a private association and therefore was not subject to state and federal public accommodation laws.


1.         The Supreme Court tied this ruling to its previous decision in Hurley v. Irish-American Gay, Lesbian and Bisexual Group of Boston, 515 U.S. 557, 115 S.Ct. 2338, 132 L.Ed.2d 487 (1995). In Hurley, the Court ruled that the sponsor of Boston's St. Patrick's Day parade could not be forced to let a group of gays and lesbians participate.


2.         The Court held that parades are a form of expression and that the sponsors could not be forced to include "a group imparting a message the organizers do not wish to convey."


H.        Public Opinion:


17.       Despite the fact that private clubs may be exempt from civil rights laws, they are still subject to the power of public opinion. In 2002, the National Council of Women's Organizations (NCWO), which has approximately six million members from over one hundred groups, announced that it would seek the admittance of women members to the Augusta National Golf Club in Augusta, Georgia. The club, with a membership of three hundred, is the home of the prestigious Masters Golf Tournament. When NCWO stated that it would contact television sponsors of the Masters to seek their help in applying pressure, the club announced it would forgo advertising revenue for the 2003 tournament.


18.       The controversy generated friction within the membership, with some members urging the admittance of women and some resigning in protest at the club's actions in dealing with the demands of NCWO. The NCWO pressed the CBS network not to televise the 2003 tournament but was rebuffed by the network. However, many corporations declined to sponsor the tournament, a sure indication that the NCWO campaign had some success.


II.        Laws governing Private Clubs in South Carolina


            19.       Currently, there are no laws governing private clubs in South Carolina.


Black’s Law Dictionary (2nd ed. 1910), pg 210, defines a Club in pertinent parts as; “[A] voluntary, unincorporated association of persons for purposes of a social, literary, or political nature, or the like. A club Is not a partnership. 2 Mees. & W. 172. The word "club" has no very definite meaning. Clubs are formed for all sorts of purposes, and there is no uniformity in their constitutions and rules. It is well known that clubs exist which limit the number of the members and select them with great care, which own considerable property in common, and in which the furnishing of food and drink to the members for money is but one of many conveniences which the members enjoy. Com. v. Pomphret, 137 Mass. 567, 50 Am. Rep. 340.


20.       However, there are laws governing Associations under Title 33.  ACDNAC is a nonprofit Association.


                        A.        Unincorporated Associations that are Partnerships:

21.       Legally speaking, when a group of people get together and decide to perform some task without filing any legal paperwork  or  establishing any formal legal structure?  Whether they know it or not, they have formed an unincorporated association. “Unincorporated association" means an unincorporated group of two or more persons joined by mutual consent for a common lawful purpose, whether organized for profit or not.


22.       Now, if the lawful purpose they’ve joined together to accomplish includes earning a profit, their association is automatically a partnership or joint venture for tax and most other legal purposes. For example,  if two people get together  and decide to operate a food truck, they

have formed a partnership, even if they file no paperwork.


            B.        Unincorporated Associations that are Nonprofits:


23.       If the purpose for the association is to benefit the public some way, and does not include earning a profit, the association’s members have formed an unincorporated nonprofit association. People form nonprofit unincorporated associations all the time; often without being aware of it. For example, if a person and his/her neighbors get together to help raise funds to keep a local library open, they have formed an unincorporated nonprofit association.


24.       If an unincorporated association’s purpose is charitable, educational, and/or scientific in nature, it can qualify as a Section 501(c)(3) organization (also called a public charity). Contributions to Section 501(c)(3)s are tax deductible. If an unincorporated charitable nonprofit has less than $5,000 in annual revenues, it may function as a 501(c)(3) without applying for IRS recognition of its status. However, as a practical matter, it may be difficult to obtain contributions without an IRS determination letter officially recognizing the nonprofit as a Section 5010(c)(3) organization.


25.       An association with over $5,000 in revenue must apply for recognition from the IRS by filing IRS Form 1023. It is not necessary for an unincorporated association to convert to a nonprofit corporation to obtain IRS recognition of its Section 510(c)(3) status. However, the association must adopt written bylaws or a constitution, and include it with its IRS application. It’s probably easier to form a nonprofit corporation than to adopt such bylaws or constitution.


26.       The biggest drawback to the unincorporated nonprofit association, and the reason nonprofits often abandon this form in favor of a nonprofit corporation, is that it has no separate legal existence apart from its members. Because it is not respected as a separate legal entity, its members generally can be personally liable for its debts and liabilities. Some states, such as California, give some limited liability to nonprofit association members; but...it’s not as good...as the protection obtainable from a nonprofit corporation. Moreover, unless a state law contains an “enabling statute” granting such rights to entities, an unincorporated association cannot hold or receive property, or sign contracts, in its own name. Because of these limitations, nonprofit unincorporated associations are usually used to accomplish limited short-term goals. Nonprofits with long-term missions should usually incorporate.  [Note: This information, in whole or in part comes from Nolo.com] {Click here to review iin its entirety}


III.       Based On Research & Prevailing Case Law in Federal Courts


27.       In order to expedite ACDNAC’s purpose and goals,  I recommend the following strategic real estate and/or business acquisition and/or development model/s and/or approach.


            A.        All clubs should be designated as private.  There are no laws, federal or state that governs the organization of private clubs that are formed for the limited purpose of pooling resources to become a shareholder in a corporate entity whose sole purpose for being is Real Estate Acquisition & Development and Business Acquisition & Development.  The Club, however it is designated is the shareholder.


            B.        All clubs regardless of name, should be designated as Affiliates pursuant to 17 CFR 230.405 – under definitions of terms that clearly state in pertinent parts;  {Click here to review 230.405]

“[U]nless the context otherwise requires, all terms used in 230.400 to 230.494, inclusive, or in the forms for registration have the same meanings as in the Act and in the general rules and regulations. In addition, the following definitions apply, unless the context otherwise requires: [Act means the Security Act of 1933.]

Affiliate. An affiliate of, or person affiliated with, a specified person, is a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified. [The person specified will be Unity International, Inc., and its Board of Directors.]

Amount. The term amount, when used in regard to securities, means the principal amount if relating to evidences of indebtedness, the number of shares if relating to shares, and the number of units if relating to any other kind of security.” [Share means one with a value to be determined by the Board of Directors of no less than $500.00 and no more than $5,000.00 for Real Estate Acquisition & Development and Business Acquisition & Development purposes]

The Following Quotes

Are From Elijah Muhammad's Book -

"Message To The Black Man In America"

“No nation will ever respect us as long as we beg for that which we can do for ourselves. There has never been a leader of our people who went all-out to set up an economic plan for our people. I use the saying of Jesus, “All before me were thieves and robbers.”
"In unity, we can accomplish much. Think of the 20 million of your and my kind putting one dollar a year aside for ourselves in a national treasury toward the day of want. Suppose we laid aside one dollar every month against the day of want. Look at the millions that we could build up for ourselves within a dew years. Suppose all of you who are wealthy would spend your wealth to build up a better and more economic system among your own people. It would do much to aid our people. Do not put your wealth in the taverns and gambling houses and on race horses and other sports. Then, you would not be so easy to push over when the day of want arrives."
"There is no need for us, millions through the country, spending our money for the joy and happiness of others. As a result, as soon as they throw us out of a job we are back at their doors begging for bread and soup. How many clothing shops do we operate in the country? Very few! Yet, all of us wear clothes. Who made our clothes for us? Who sold them to us? We have thousands of grocery stores, but what about our naked bodies? Should we not have more stores to sell our people clothes? Should we not sell our people everything they want or need? But no, we give all the money out of our pockets to the slave-master. We are satisfied in doing so. There are millions of us. We do not have enough factories to weave clothes for our people here in America. Think over that. Where is our shoe factory? Where are our cattle that we are skinning to make shoes for our people? These are small things, but we want equality with a nation that is doing these things."
"We boast that we should be recognized as equals. Let us make ourselves equals. We cannot be equal with the master until we own what the master owns. We cannot be equal with the master until we have the freedom the master enjoys. We cannot be equal with the master until we have the education the master has. Then, we can say "Master, recognize us as your equal".
"Today you are begging the master, the slave-masters' children for what? You are begging them for a job. You are begging for complete recognition as their equals. Let us be honest with ourselves. According to history, we cannot find where the master made his slave equal until the servant made himself worthy of equality."
"I am with you to go on top. We cannot go on top with weight that is hanging on us. We cannot charge the white man with our faults. We are supposed to be, according to his own teachings, free. We are supposed to have been freed from him approximately 100 hundred years ago. Have we exercised that freedom? We must answer that we have not availed ourselves of that freedom. If we have not availed ourselves of that freedom which he says he gave us, why should we think hard of him about the way he treats us? This may be a little hard to swallow."
"Our fathers, in the days they were set free by the slave-master, had no knowledge of how to go for self. Today, you are educated. You claim that you have equal education. Then, why don't you take a walk? Before we can be justified in accusing the other man, let us examine ourselves first. I do not say that our fathers are the ones to blame for their ignorance, and neither are you. Neither they nor you are at fault. The root of the cause can be placed back into the laps of the slave-masters. When the slave-masters say we are free and continue to say that we are free, should we take a free step? We charge the slave-masters' children with mistreating us. Suppose you tell a man that he is free. "Get out of our house and go into your own house". But the freed slave says, "No, no, I'll work for you. I'll serve you as a servant if you will allow me to remain in your house". The man of the house tells you, "I will not give you a new suit this year. I'll not pay you today for any work. Go home and sit down". Why should you say that man is not treating you right? Why say to that man, "I have a job the same as you". Has not he offered the door to you?"
"If the slave-master did not mean that you and I were free, we should have them admit it. You remain as a free slave to your slave-master. You demand that he recognize you as his equal. You are making yourself look small in the eyes of the world. If every so-called Negro was fired, what would you do? Would you unite and go to Washington and demand that the government give you a job? You would be foolish enough to do that! If they beat you by the thousands, what right have you to say that he should not lash you? You have made yourself his slave. You continue to preach a doctrine of remaining with the slave-master. You are still called by your slave-masters' names. By rights, by international rights, you belong to the white man of America. He knows that."
"You have never gotten out of the shackles of slavery. You are still in them. You are still in authority over your wife as long as she goes in your name, regardless of her separating herself from you. If she has not gotten a legal divorce and freed herself from your name, you are still in authority over her by law. Likewise, you are still under authority of the chains of your slave-masters. You have not tried to free yourself from them. You have not exercised the freedom that they claim to have given you."
"Today is the day of decision. We have lived here more than 400 years. ---- Today you are standing face to face with the alternative of accepting your own or forever being erased from the earth as a people. No one is trying to make you see this importance but your own. Why so you not see? You are blindly looking toward the slave-master to tell you this. How can the master tell the slave, "Look, slave, your day has arrived. You should sit in the seat of authority". We cannot beg for jobs anymore. We cannot build a future on a job that was given to us by the slave-master 400 years ago. That day has arrived. He has no more work for us to do. He is not willing to tell is that. The time has arrived when deep within his own heart he desires you to go out and find a job for yourself. He will forever be burdened. The burden will get greater and greater as long as he tries to carry you and me."


Images from Google's public source - 8/2015
2015 - George M. Sistrunk - All Rights Reserved. 

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