HOUSE CORPORATIONS FOR SIGMA CHI CHAPTERS Corporate Governance

HOUSE CORPORATIONS FOR SIGMA CHI CHAPTERS Corporate Governance & Legal Issues

START THE RIGHT WAY • File proper Articles of Incorporation • Hold the first meeting within 30 days of incorporation • Tax filings must follow • Hold elections • Set up a corporate bank account • Adopt Bylaws and Standard Operating Procedures • Follow Robert’s Rules of Order

What a house corporation is and is not: • The house corporation is an independent legal entity, apart from Sigma Chi Fraternity, whose sole businesses it is to procure and manage real estate and related property. This includes the alumni chapter. • House corporations have no authority over the active chapter…. reserved for the Grand Officers, the Chapter Advisor and their staff at HQ.

Avoid the following: • Use of the name Sigma Chi in corporate name and in fund raising • Interference in the operations of the active chapter • Misappropriation of funds, two signatures on accounts • Slush funds • Ignoring unsafe and unhealthy conditions • Failing to have one POC to outside sources

Horror Stories • • Inadequate records and documents Unauthorized acts Joint and several liability Putative partnership=individual loss risk. Fiduciary duty Embezzlement IRS audits State Audits Loss without insurance in place

Summary Checklist • • • Proper formation Proper and up to date records Compliance with all laws Maintain separate identity Use proper leases Arms-length dealing with the tenants and the fraternity Insurance No unauthorized acts Follow the by-laws and sops Devise an emergency plan Use the resources available including the Grand Trustees Remember your “Ancient Patron of House Corporations”, Harv Silverman. Contact me if you need help… harveyas@aol. com or 703. 319. 8806

AVOID THE FIREWORKS • Start the right way. Use an attorney • Record Maintenance • Follow your by-laws and Standard Operating Procedures • Proper Tax Filings • Have an emergency plan • Insurance, insurance and more insurance