Forming a non-profit to support a local chapter of a national non-profit corporation just seems silly in order to avoid a contingency that COULD happen but has not ever happened to just about anyone. 

Plus, I don't see how you could legally utilize money from a separate non-profit for CAP squadron needs without having to give it to the corporation anyway. 

Quote from: RiverAux on August 25, 2007, 01:13:06 AM
Forming a non-profit to support a local chapter of a national non-profit corporation just seems silly in order to avoid a contingency that COULD happen but has not ever happened to just about anyone. 

Plus, I don't see how you could legally utilize money from a separate non-profit for CAP squadron needs without having to give it to the corporation anyway. 

CAPR 173-4, CAP/CC Letter, Changes in Financial Policy Regards Gaming & Booster Clubs

Quoteb. Booster Clubs. CAP policy regarding "booster clubs," organizations created
to support local units, is being formulated. However, the fundamental policies are set
out below. Those policies identified with an asterisk (*) only apply to booster clubs
formed after this date:

(1) Parents, community leaders, and CAP members may create booster
clubs to support local units. Such booster clubs must exist as entities wholly
separate and apart from any CAP control and bear sole responsibility for compliance
with local, state, and federal laws.

(2*) CAP corporate officers, commanders, and executives (managerial employees)
are prohibited from participating in the creation, organization, or control (serving in positions
of authority) in these organizations. Serving in an advisory capacity, to report on the status,
needs, and wants of a unit and its members, is acceptable.

(3*) Booster clubs may not utilize the names "Civil Air Patrol" or "United States Air
Force Auxiliary," or any abbreviation thereof as part of their names or identification.
(4*) Subject to the approval of the unit commander, booster clubs may use the name
of the unit as part of their names or identification. For example, "Friends of Wright Brothers
Composite Squadron 123" would be acceptable.

(5) Serving concurrently in positions of control in CAP (CAP corporate officers,
commanders, and executives (managerial employees)) and a "booster club" is prohibited.
Those presently serving concurrent positions of control in such organizations must cease
doing so no later than 31 March 2007.

From the State of Alabama. I haven't checked every state, but the ones I have all had similar statements in their state banking laws.

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Section 5-1A-3
Use of words "bank," "banker," "banking," etc., restricted.

The use of the words "bank," "banker," "banking" or words of similar meaning in any foreign language as a designation or name, or as part of a designation or name, under which business is or may be conducted in the State of Alabama, or in its advertising is restricted to banking corporations organized under the laws of Alabama, other states, the United States or foreign countries. All other persons, firms, or corporations are prohibited from using the words "bank," "banker," or "banking" or words of similar meaning in any foreign language as a designation or name or as part of a designation or name under which business may be conducted in this state. Any violation of this prohibition shall subject the party chargeable therewith to a penalty of $100.00 for each day during which it is committed or repeated. Such penalty may be recovered by the superintendent by an action instituted for that purpose, and, in addition to said penalty, such violation may be enjoined and the injunction enforced as in other cases. This section shall not be applicable to any residents of this state regularly engaged in business in this state as individuals, partnerships, unincorporated associations or Alabama corporations now lawfully using such words in their trade or firm name.
(Acts 1980, No. 80-658, §5-1-3.)

So I guess the name needs to be changed, at least in Alabama....now does that apply only to the wing & its subordinate units? I know NHQ is in Alabama, but it is on federal property, and is Incorporated I believe, in Delaware.

A rose, by any other name...

Quote from: ZigZag911 on September 27, 2007, 10:34:23 PM
So I guess the name needs to be changed, at least in Alabama....now does that apply only to the wing & its subordinate units? I know NHQ is in Alabama, but it is on federal property, and is Incorporated I believe, in Delaware.

Well, it's much more than a name change that needs to happen, and while they may be incorporated, they are not incorporated as a "Bank".

As I have pointed out before (http://captalk.net/index.php?topic=908.msg35830#msg35830), if you approach an individual or more importantly an organization, or government agency and request financial support then you need to be prepared to fully disclose how those funds are accounted for and controlled.

I have been accused on this board of torpedoing my units funding source by revealing that under CAP's regulations all donations have to be surrendered to the "Wing Bank". The fact is (and below are some more examples) that the "Wing Bank" IS NOT a legal "bank" neither in my state, nor under any other states definition that I can find. It is merely a checking account, and the only protection it offers is to the signatories on the actual bank account. If you deposit funds in the wing bank that later turn up missing, there is no state or federal protection for your unit, because the laws only apply to the account holder, which is whoever the wing decides to assign. (I know, the regulations are supposed to protect you. Does anyone really want to debate what protection the regulations offer to your unit?)

What I do know is that in my state, especially in the situation where we stood to receive financial support from a taxpayer appropriated source, the fact that we were "giving" the money away was a deal breaker. But if we had failed to disclose that the Wing "Bank" was not a real bank, where we actually had control of the funds, we would have been guilty of fraud.

State of Georgia
§ 7-1-241.  Restrictions on engaging in banking business
(a) No person or corporation may lawfully engage in this state in the business of banking or receiving money for deposit or transmission or lawfully establish in this state a place of business for such purpose, except a bank, a national bank, a credit union to the extent provided in Article 3 of this chapter, a licensee engaged in selling checks to the extent permitted by Article 4 of this chapter, an international banking agency to the extent provided in Article 5 of this chapter, a building and loan association to the extent provided in Article 7 of this chapter, or a savings and loan association to the extent provided by the laws of the United States


State of Florida
(2)  No person other than a financial institution shall, in this state:
(a)  Transact business under any name or title that contains the words "bank," "banco," "banque," "banker," "banking," "trust company," "savings and loan association," "savings bank," or "credit union," or words of similar import, in any context or in any manner;

State of California
3390.  No person which has not received a certificate from the commissioner authorizing it to engage in the banking business shall solicit or receive deposits, issue certificates of deposit with or without provision for interest, make payments on check, or transact business in the way or manner of a commercial bank, industrial bank, or trust company.

Give me a break.  "Bank" is just being used as a term of convenience by CAP for this accounting program.  What they are doing is absolutely no different than how just about all businesses handle their money.  They aren't breaking any banking laws by doing so. 

That law states you can't use the word "bank", "banker" or "banking" in the name of your business.  So we couldn't promote ourselves as the "Civil Banking Patrol" in Alabama.

The law doesn't mean that not a single organization in Alabama which is not an actual bank could use the word bank to refer to a policy or program.   

Out of context.

I guess I can't legally break the "bank" in Vegas next time...

Quote from: ZigZag911 on September 27, 2007, 10:34:23 PM
So I guess the name needs to be changed, at least in Alabama....now does that apply only to the wing & its subordinate units? I know NHQ is in Alabama, but it is on federal property, and is Incorporated I believe, in Delaware.

I believe the incorporation is a federal thing. 

Quote from: Pylon on September 28, 2007, 01:37:00 AM
...So we couldn't promote ourselves as the "Civil Banking Patrol" in Alabama...

Um...  That would be the "U.S. Civil Banking Patrol"... 

Quote from: JC004 on September 28, 2007, 04:16:30 AM
I believe the incorporation is a federal thing. 

While CAP is Congressionally chartered, I'm pretty sure that incorporation occurs at the state level only.

Quote from: ZigZag911 on September 28, 2007, 01:18:45 PM

Quote from: JC004 on September 28, 2007, 04:16:30 AM
I believe the incorporation is a federal thing. 

While CAP is Congressionally chartered, I'm pretty sure that incorporation occurs at the state level only.

If it is in a state, it can't be Delaware, because the corporate seal doesn't meet the requirements.  Last time I incorporated something in DE, the guidelines for the seal stated that the state name has to be on there.  Maybe it's Nevada.  I think being incorporated in NV is almost as cool as being incorporated in DE, and the NB did seem to have a special liking for NV.   

Update
Scratch that...
"On 1 July 1946, Public Law 476, 79th Congress, 2nd Session, was signed into law. It incorporated the Civil Air Patrol and authorized the incorporators named therein to complete the organization of the corporation by the adoption of a constitution and by-laws and regulations, and by the selection of corporate officers, etc."

Quote from: RiverAux on September 28, 2007, 01:32:28 AM
Give me a break.  "Bank" is just being used as a term of convenience by CAP for this accounting program.  What they are doing is absolutely no different than how just about all businesses handle their money.  They aren't breaking any banking laws by doing so. 

Well, to begin with, there's no provision that I can find that gives exceptions for "convenience", and while CAP may be incorporated, I'm pretty sure that they are not incorporated as a "bank", which like it or not, is defined under state laws.

State of Alabama

Section 5-1A-3

Use of words "bank," "banker," "banking," etc., restricted.

The use of the words "bank," "banker," "banking" or words of similar meaning in any foreign language as a designation or name, or as part of a designation or name, under which business is or may be conducted in the State of Alabama, or in its advertising is restricted to banking corporations organized under the laws of Alabama, other states, the United States or foreign countries.

Don't you see that the law you're quoting is talking about using "bank" as part of the name of a business? 

It doesn't prohibit businesses from using the term as part of their own internal policies and procedures manual (which are esentially what CAP regulations are).

While I disagree with those who think this is some big scam on the part of NHQ to steal the money your squadron earned at the car wash, I do understand their concerns.  But, it definetely isnt illegal.   

Quote from: RiverAux on September 28, 2007, 04:59:54 PM
Don't you see that the law you're quoting is talking about using "bank" as part of the name of a business? 

No, its not. In order,

--------------------------------------------------------------------------------------------------------

Section 5-1A-1

Short title.

Chapters 1A through 13B and Chapter 20 of this title shall be known and may be cited as the "Alabama Banking Code."

-------------------------------------------------------------------------------------------------------

Section 5-1A-2

Definitions.

For the purposes of Chapters 1A through 12A of this title, the following terms shall have the meanings respectively ascribed to them by this section:

(1) BANK. Any banking corporation or trust company organized under the laws of this state under the jurisdiction of the superintendent of banks of this state or organized under the laws of the United States having its principal place of business in this state.

---------------------------------------------------------------------------------------------------

Section 5-1A-3

Use of words "bank," "banker," "banking," etc., restricted.
The use of the words "bank," "banker," "banking" or words of similar meaning in any foreign language as a designation or name, or as part of a designation or name, under which business is or may be conducted in the State of Alabama, or in its advertising is restricted to banking corporations organized under the laws of Alabama, other states, the United States or foreign countries. All other persons, firms, or corporations are prohibited from using the words "bank," "banker," or "banking" or words of similar meaning in any foreign language as a designation or name or as part of a designation or name under which business may be conducted in this state. ...

-------------------------------------------------------------------------------------------------------

Quotedesignation or name, or as part of a designation or name,

Quoteas a designation or name or as part of a designation or name under which business may be conducted in this state. ...

So the Red Cross can't maintain a blood "bank" in Alabama?  And flight schools can hold classes on "banks and turns"?

Quote from: lordmonar on September 28, 2007, 08:35:21 PM
So the Red Cross can't maintain a blood "bank" in Alabama?  And flight schools can hold classes on "banks and turns"?

I suppose seamboats can't tie up to the banks of the Mississippi

"name under which business is conducted" means the name of the business.  Not names of internal programs, policies, documents, etc.

Again, as was stated earlier, we can't call ourselves the "U.S. Civil Banking Patrol" but we can have a program or a policy that uses the word bank.


To answer questions earlier about in which state we're incorporated, Civil Air Patrol, Inc. is federally chartered and incorporated.