Legal Considerations

Consult an Attorney

Before you can begin collecting dues and doing business as a guild or association, there are federal and state legal considerations and registration requirements you must follow to obtain tax-exempt status. Consulting an attorney on these issues is strongly recommended, as requirements will vary from state to state.

Tip: Use your connections, there are often craft beer enthusiasts, brewers or others in the industry who have legal backgrounds.

Paperwork

Mission

What is the guild’s purpose—promotion, advocacy in state politics, education or a combination?

ResourcesSample Mission Statements

Bylaws

A guild’s bylaws spell out how business will be conducted, the size and election of a board of directors and how the guild/association will be funded.

In your association bylaws, it is important to include specific information for each class of membership. An unambiguous definition of each class, outlining each class’s criteria and spells out voting rights.

Resources: Dues/Membership and example bylaws: Minnesota, North Carolina, Oregon, Pennsylvania, Tennessee and San Diego.

Articles of Incorporation

Each individual state has paperwork that must be filed to become an incorporated entity.

Resources: Example articles of incorporation: Minnesota, North Carolina and Wisconsin.

IRS Non-Profit Status

Your guild or association will most likely be applying for non-profit status as a 501(c)6.

Resources: Learn about applying for 501(c)6 status and view the application.

Initial Paperwork

First, you must obtain a Federal Employer Identification Number (EIN), even if you will not have a paid staff. This is like a Social Security Number for your guild. Banks require an EIN to set up an account. You can file form SS-4 online at IRS.gov.

Most brewers guilds and associations fall under section 501(c)6 of the Federal Tax Code. This is the designation for trade associations and business leagues. While online filing for your EIN, download Publication 557: Tax-Exempt Status for Your Organization. It contains information and forms required for obtaining 501(c)6 status.

In addition, you will want to check with your state’s Attorney General’s office or the Department of State to find out about requirements particular to your state. Again, the advice of an attorney with respect to these issues is essential.

Resources: Things a U.S.-based nonprofit must (and must not) do.”

Taking Minutes to Protect Organization

The purpose of taking minutes is to protect the organization and the members who participate in the meeting. Minutes are not intended to be a record of discussions, nor serve as a newsletter for the organization. Minutes should be kept as brief as possible, and should only reflect action taken at the meeting.

ResourcesMeeting Minutes Handout

Compliance with Antitrust Laws

In addition to making sure that your guild or association receives tax-exempt status, you must comply with antitrust laws, which consist of federal laws and potentially your individual state’s laws.

Generally speaking, antitrust laws encourage appropriate collaborative efforts to promote products, exchange innovative ideas and attempt to influence government policy.

Antitrust laws generally forbid conduct among competitors that unreasonably restrains trade. In the guild setting, members should avoid any conduct that might lead to an inference on which members have agreed to set terms. These would be competitively-significant items like prices, discounts, rebates, output, credit terms, customer allocations or boycotts of customers or distributors.

As guild members are likely to be competitors, the agreements among competitors of these types could lead to serious antitrust liability.

If any guild or association activities involve sensitive, competitively significant topics like those described above (price, discounts, etc.), members should refrain from addressing those topics without prior approval from an attorney.

Guild members must exercise common sense when participating in meetings or activities to avoid any perception that they are engaged in conduct that could run afoul of antitrust laws.

Resources: Antitrust Guidelines for Joint Purchasing Arrangements and Illinois Craft Brewers Guild Antitrust Compliance Policy – ICBG has graciously shared their comprehensive antitrust policy.