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Opening Corporate Account Form by fek19654


Opening Corporate Account Form document sample

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 Mazelle Attiya, SCA Corporate Treasurer
      Tom Hughes, SCA President

•   Welcome and Introductions
•   Background
•   Transition Process
•   Opening New Bank Accounts
•   Reporting
•   Frequently Asked Questions
•   Wrap Up and Conclusion

    Welcome and Introductions
SCA President
Master Sean o’Shaughnessy
Tom Hughes

     Welcome and Introductions
SCA Corporate Treasurer
Maitresse Alysia Gabrielle de Fougeres
Mazelle Attiya
(901) 833-4263

• Why is SCA forming Subsidiary Corporations?
  – SCA was created in 1966.
  – SCA, Inc. was formed in 1969 and has operated
    successfully ever since.
  – SCA formed affiliate corporations in those
    countries requiring “in country” corporations for
    not-for-profit corporations.
  – Forming US subsidiary corporations will reduce, if
    not eliminate, the cost of complying with new
    State laws covering not-for-profit organizations.

• Illinois transition has been completed
   – $150,000 gross revenues threshold triggers audited financial
     statements – estimated cost: >$150,000/year for all 700+
     branches in US.
      • Applies to all not-for-profits operating in Illinois.
      • Boy Scouts, Girl Scouts, hospitals, etc. completed their transitions
        last year
      • SCA, Inc. had revenues of $4.5 million in 2007 (SCA’s IRS Form 990).
      • Need to structure corporation to less than $150,000 per year in
        revenues to avoid audited financial statement requirements.
   – 19 bank accounts in 18 local groups and 1 kingdom account
     at start of process.
   – 1 kingdom account moved out of state; 1 group dissolved;
     17 groups created new bank accounts.

Background – SCA-Illinois Milestones

•   Wisconsin - Completed July 31, 2010
•   West Virginia – in process
•   Michigan – starting (2 kingdoms involved)
•   New Jersey - starting

            Transition Process
• Lessons learned from SCA-Illinois, Inc.
  – Preparation at SCA Corporate level
  – Preparation at Kingdom and Regional levels
  – Converting or moving kingdom bank accounts
  – Transitioning regional bank accounts
  – Transitioning local branch bank accounts

           Communication is crucial!

              Transition Process
• What do we need to do?
  – Form subsidiary as a wholly owned subsidiary of SCA, Inc.
    per Federal and State laws – SCA Board of Directors.
  – Complete Articles of Incorporation – SCA attorneys.
  – Complete By-Laws – SCA attorneys.
  – Apply for and receive Federal Taxpayer ID Number – SCA
    Corporate Office after attorneys finish above documents.
  – Make all documents available to local branch, regional and
    kingdom exchequers – Society Exchequer.
  – Close out existing bank accounts under SCA, Inc. – local
  – Open new bank accounts – local exchequers.

            Transition Process
• New banking requirements due to “Patriot
  Act” subsequent to 09/11/01
  – Banks conduct more due diligence on new bank
    accounts, especially, not-for-profit accounts.
  – Bank accounts opened prior to Patriot Act banking
    requirements implemented will require more
    documentation than banks have for current

      Opening New Bank Accounts
• SCA Corporate Documents:
  – Articles of Incorporation for the subsidiary (created by SCA attorneys)
  – By-Laws for the subsidiary (created by the SCA attorneys).
  – Tax Payer Identification Letter (created by the US IRS).
  – Resolution of the Board of Directors to open bank account (created
    by the SCA, Inc. Corporate Secretary (Vice President of the Corporate
    Office in Milpitas, California). Must be faxed or mailed directly from
    the Corporate office directly to the individual bank’s representative for
    the bank/checking account.
  – Letter of Authorization specifies signatories on bank account of
    authorized named, specific individuals to a bank account. (created by
    the SCA, Inc. Corporate Secretary - Vice President of the Corporate
    Office in Milpitas, California). Must be faxed or mailed directly from
    the Corporate office directly to the individual bank’s representative for
    the bank/checking account.

     Opening New Bank Accounts
• In order to get a Resolution of the Board of Directors to
  open bank account, local branches must send the following
  information to the Society Exchequer who verifies accuracy
  and completeness and send request to SCA Corporate:
   – Name of the local SCA group
   – Modern names of the signatories (This must include kingdom
     and/or regional exchequer as a signatory on the account)
   – Bank name
   – Bank address
   – Name of bank contact/to whom the paperwork should be sent
   – Bank's fax number
   – Contact phone number and/or e-mail address with the Modern
     name of the Group Exchequer in case of bank communication

      Opening New Bank Accounts
• Exchequer and all bank account signatories fill out bank required
  forms and present following to the bank:
    – Articles of Incorporation
    – By-Laws
    – Federal Taxpayer ID letter from IRS
• SCA VP of the Corporate Office, Renee Signorotti, will fax Resolution
  of the Board of Directors to open bank account to bank point of
• Exchequers and co-signatories:
    – Transfer funds from old bank account to new bank account – suggest
      that local branches use same bank for old and new accounts and
      change banks later if they want to change banks
    – Close out old bank account with bank manager
    – Deposit all funds from old bank account into new bank account
    – Retain bank statements for both old and new accounts

           Exchequer Reporting
• Continue reporting all income and expenses on SCA,
  Inc. until subsidiary formed and transitioned. Report
  “donation to another 501c3” from SCA, Inc. to
  subsidiary to close out old bank account.
• Begin reporting all income and expenses on subsidiary
  after transition completed. Report “donation from”
  from SCA, Inc. to subsidiary to open new bank account.
• At end of quarter and year, exchequers prepare
  quarterly and Domesday reports for both old bank
  account showing zero balance and new bank account!

         Exchequer Reporting
• New State specific exchequer workbooks have
  been developed and are currently being
• New State specific exchequer workbooks will
  be available for third quarter 2010.
• Kingdom exchequer will prepare consolidated
  Kingdom Domesday report including,
  subsidiary and prepare a separate Domesday
  for subsidiary.

     Frequently Asked Questions
• What is the procedure for transitioning to
  subsidiary corporations?
  – Standard Operating Procedure for the Formation
    Of and Transition To Subsidiary Corporations Of
    SCA, Inc.

• Why is this necessary?
  The SCA, Inc. needs to register as a foreign corporation
  in all states in order to do business legally. Some states
  have restrictions and/or requirements for corporations
  registered as foreign corporations that the SCA, Inc.
  cannot satisfy. Setting up a subsidiary corporation
  allows the SCA, Inc. to register and do business in that
  state without some of the unwieldy restrictions and/or
  Please note, “foreign corporation” simply means a
  corporation that is not based in that particular state.

• Why isn’t registration with the state sufficient?

  Registering with a state is sometimes not as simple
  as filling out a form and paying a fee every year.
  Some states require foreign corporations to file state
  income tax returns. Even though we may not pay
  state taxes, we will still have to file tax returns. Some
  states also have financial auditing requirements,
  including formal audits of branches where the
  corporation is sufficiently large. Multiple states fall
  into this category at this time.

• Who makes this decision?
  The SCA, Inc. Board of Directors, the SCA President, and the SCA
  Treasurer make the decision to create subsidiary corporations.

• Who is responsible for implementing this?
  The SCA Treasurer, the Society Exchequer, the Kingdom Exchequer
  and all branch Exchequers within the state are responsible for
  implementing the transition to subsidiary corporations. The
  Seneschal equivalents at all those levels must assist in this for
  several reasons. Most of the seneschals are also signatories and
  bank accounts and the seneschals continue to ensure that the SCA
  meets all of its legal obligations.

• How is this different from affiliation like SCA Australia and
  other affiliates?
  Affiliated organizations are subject to different civil laws in their
  countries, and so their corporate documents are not the same.
  Their Boards of Directors are completely different people. The only
  thing affiliate organizations share with the SCA, Inc. is Corpora.
  A subsidiary company is one whose controlling interest is owned by
  another company. Subsidiaries use the same corporate documents
  except for those that specifically apply to the state. So SCA, Inc. and
  SCA-IL, Inc. share not only Corpora, but the Corporate Policies and
  any other governing documents that do not have a specific SCA-IL,
  Inc. version.

• Why do this?
  Several states require that corporations having over
  different threshold gross income submit to (and pay for)
  formal audits of all included branches. The SCA, Inc. is well
  above that income limit. If the SCA, Inc. itself was to
  register in states, we would not have enough money to pay
  for the formal audits of all US SCA branches even once. The
  branches in individual states together do not come close to
  the annual income amount, so creating a subsidiary and
  registering that subsidiary sin will allow us to operate
  within without those costly audits for a while.

• Is my state first?
  No. Illinois was the first state in this situation. Like Illinois, the
  local groups in many states all fall under the same Kingdom
  making it simple to convert. Those states with multiple
  kingdoms will require a little more work for the Society
  Exchequer but not the local branches.

• Will other states need to do this too?
  There are other states in similar situations that will need to go
  through this process. States containing more than one
  kingdom and local groups residing in more than one state will
  be more difficult to transition to subsidiaries.

• How many states have formed subsidiaries?
   As of October 2010, there are a total of 6 subsidiaries:
       • Illinois
       • Wisconsin
       • West Virginia
       • Michigan
       • New Jersey
       • Maryland

• What does the new corporation look like? Who is the Board
  of Directors? When are their Board meetings?
  The new corporation looks like a small, mirror image of SCA, Inc.
  The Board of Directors of the SCA-Wisconsin, Inc. is the same as the Board
  of Directors of SCA, Inc. The SCA-Wisconsin, Inc.’s Articles of Incorporation
  are almost exactly the same as the SCA, Inc.’s Articles of Incorporation.
  Corpora is the same, Bylaws are the same, Corporate Policies are the
  The Board meetings will be at the same time and place – and be similar to
  a court where the Crown allows a Baronial Court as part of their Court.
  The Board meeting for subsidiary will open, and if there is any business, it
  is conducted. Then that meeting will close, and the meeting for the SCA,
  Inc. will open.

• What about SCA members living in subsidiary
  corporations? Are they members of SCA, Inc.

 SCA, Inc. members in subsidiary corporations are still
 members of SCA, Inc. There won’t be any members in the
 subsidiary corporations except for the Society for
 Creative Anachronism, Inc. SCA, Inc. membership cards
 are still in effect, and nothing changes about the process
 of purchasing membership for anyone in subsidiaries.

• Are there any changes in events in subsidiary

  No and Yes.
  – Events can occur just the same as they do today. SCA, Inc.
    insurance will still be available for events and practices.
  – The only change is that all ads have to say to make the
    check out to SCA-[state], Inc. - [branch] instead.

• Are there any changes to how the branches in
  subsidiary corporations will do business?

 No, the subsidiary branches shouldn’t notice any
 change in anything other than the one-time change
 of bank accounts, and financial reporting going
 forward. Nothing else changes due to this transition.

• How do we handle Certificates of Deposit that

  Let the CD’s go to full maturity, close them out of SCA,
  Inc., donate funds to the subsidiary when they mature.
  Show the CD as an asset on SCA, Inc. and as a payable to
  subsidiary on quarterly and Domesday reports.
  When the CD’s mature, open new CD’s if that is the
  desire of the local group. This avoids incurring early
  cancelation fees and complies with the contractual
  requirements of the CD’s.

Wrap up and Conclusion
 Any other questions?
       Thank you


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