Starting a yacht club is a glamorous adventure. Racing, sailing, sunbathing and mingling with the jet set are all part of the spectacle. Although all might be smooth sailing, running an organization requires business elements. Tax considerations, entity classification and insurance for yacht clubs are required as you set things in motion.
Tax considerations are tied directly to entity classification for the IRS. Sole proprietorship’s, partnerships, corporations and S corporations start the conversation. Each type has pros and cons. Envision what type of yacht club is to be formed. Its location, amenities, activities and magnitude and scope are all critical to making an informed decision. After the course is plotted for classification, tax ramifications come to the fore. Proper navigation requires thought and an expert helm.
Next up is liability coverage. As decisions are made about the aspects of the yacht club, the insurance points can be laid out. Will there be regattas? Racing with power or sail? Will beginner classes be taught? These and many other considerations will be taken into account in the formulation of a proper and robust policy.
Enjoy the glamour but remember that it is a business. Do not neglect basic principles including taxes, entity formation and insurance for yacht clubs. Seek out professional help to navigate to the optimum destination. Do the job well, and it will be smooth sailing!