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Wednesday, July 23, 2008

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Subject: Incorporation?

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DavidT3
(Texas)

Posts:18

05/13/2008 6:40 AM
What are the advantages and disadvantages of making a HOA an incorporated association? How would one go about taking these steps? Any help would he be appreciated. Thanks- D

MaryA1
(Arizona)

Posts:1023

05/13/2008 7:06 AM
David, First of all, are you asking this question just out of curiosity or are you saying your HOA isn't incorporated? If the latter, I'm surprised that the developer of your HOA didn't go through the process of incorporating. But, the procedure is quite simple. The Articles of Inc. are filed with the Sec. of State - there may be a nominal fee. An announcement must be published in the local newspaper for 3 days. Then the CCRs are recorded with the Co. Recorder's Office. Now that's the procedure in AZ; you would want to check with the TX Sec. of State for correct info. I'm sure you can go online and gather this info. One the the biggest advantages to inc. is that the debts of the corp. are not on the shoulders of its shareholders (in this case assn. members)and I believe that also means any liabilities. There are many other advantages and disadvantages but they pertain to shareholder corps not HOAs. Also, I can't see how income taxes would be filed if the HOA was not inc. If a business entity is not a corp or a partnership, then the tax designation is "self-employed" wherein the owner files a Schedule C with his personal income tax return. I don't know how this could be done with an HOA.

DavidT3
(Texas)

Posts:18

05/13/2008 7:09 AM
Curiosity.....I'm pretty sure we are. Just wondering about the process.

SusanW1
(Michigan)

Posts:1187

05/13/2008 2:02 PM
How big is your complex and/or neighborhood, and what is your budget? (annually) What is your mission? (What do you provide to the residents and what are your assets and liabilities?)

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Forums > Homeowner Association > HOA Discussions > Incorporation?

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