Membership fees are Definition, types, size and features

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:46

Every adult knows what membership fees are, especially those who grew up under Soviet rule. This is a voluntary donation of one's own funds for the needs of any organization in which a person is a member, carried out regularly.

Is it? What are the membership fees? Are their sizes regulated by law? Do all organizations have the right to collect funds from their members? As a rule, an ordinary person who does not have a special legal education is not ready to answer these questions.

What is this? Definition

Nominally, membership fees are one of the sources of funds that make up the budget of a public organization. Their main difference from other sources of finance is in the intended purpose. This source of funding is spent solely on ensuring the conditions for the activities of the organization.

This means that membership fees can be used to pay rent for premises, state fees, purchase food for any gatherings and other similarthings. However, membership dues are not a source of funds to pay for the time and work of the leaders of the organization. That is, it is impossible to pay wages to the chairman of the management committee of any society from the money collected from the members of the organization.

How are they regulated? Payment Method

Payment of membership fees is made in accordance with the established procedure in accordance with the charter of a public organization. This means that each public organization that collects funds from its members on a regular basis can establish its own procedure for receiving them.

As a rule, the procedure for collecting funds, the terms of payment and the amount of contributions are prescribed in the charter of the company. In small organizations, they can be determined at a general meeting of members of the society by a majority vote. For example, in this way the amounts of contributions collected from people and the terms of payments in gardening associations are determined.

What could they be? Types of contributions

Membership fees are not earmarked or introductory fees, with which they are often confused. Membership payments include those that are paid regularly, in accordance with the charter of the organization or the schedule adopted at the meeting of people included in the society. The amount of these payments is regulated by the same - the charter, or the decision of the general meeting.

Accordingly, the difference between payments to the budget of a society or an organization is as follows:

• membership - are charged constantly and in a fixed amount, with a clear schedule;
• introductory - one-time, with a set value;
• Targeted - made for specific needs and acquisitions, if necessary, with an unregulated amount.

So all contributions are different. Although in everyday speech they are not separated, calling them "members".

About target payments

Target payments are one-time material contributions from people who are members of a society or members of an organization for specific specific needs. This means the following. For example, in a horticultural community at a general meeting, it was decided to dig a garbage pit. For digging, you need to hire an excavator and, of course, workers. It is likely that you need to get permission to dig it.

These activities come at a cost. Accordingly, a person is selected who will organize the digging of the pit. The person appointed by the general meeting to be responsible for organizing the digging finds out prices, finds contractors, specifies the terms of work, and, if necessary, receives permission from state bodies.

At the next meeting, the appointed person responsible for organizing the digging reports. That is, a person tells members of the society about the options for digging and provides estimates for each of them.

Next, the appropriate option is selected at the meeting. That is, one of the options proposed by the responsible person is selected, for which the majority of those present voted. After that, the value of the amount from the estimate of the selected project is divided by the number of members of the society. The resultingnumber and becomes the size of the target contribution.

The meeting also makes a decision on the timing of the delivery of funds. Target contributions are paid, as a rule, to the person who was previously appointed responsible for organizing the digging.

About entry fees

Membership fees, the entries of which on the accounting statements reflect the joining of newcomers to the society, are called introductory. Just as in the case of regular payments, the size of the entrance fees are prescribed in the charter of the organization and are regulated by it.

As for companies that do not have a charter, the size of the entrance fees are regulated by the decision of the general meeting. This decision is fixed in the minutes of the meeting.

Are membership fees limited for summer residents?

In July 2017, a federal legislative act was adopted obliging to dissolve all forms of communities of summer residents that existed at that time. They were replaced by two types of organization of gardening groups:

• TSN - association of property owners;
• HOA - homeowners association.

The law obliges community members to pay membership and target fees. However, the amount of membership fees in horticultural communities is still determined by the general meeting. The law limits only the terms - at least once every two months.

But this does not mean at all that the amount of payments is not limited by anything. How much money willpay is determined by the ratio of the following:

• current general needs - electricity, garbage disposal, etc;
• maintenance, repair of roads, water pipes or other facilities;
• required community services from outside.

This list can be supplemented, since each community has its own needs, for which the funds raised by collecting contributions are spent. Financial estimates are provided by the accountant or the chairman of the community, and based on the data recorded in them, the meeting decides on the amount of regular contributions. Cooperative membership fees are regulated in the same way.

Can I not pay them?

Don't pay fees unless the community or organization saves the person from paying them. In all other cases, non-payment of membership fees leads to sad consequences.

What exactly will happen to the debtor is an individual question. The measures taken in relation to people who are in arrears in regular payments are prescribed in the charter of the organization. In the absence of a charter, the decision on what to do with those who do not pay membership fees is taken at the general meeting of the society.

What happens if you don't pay?

This question is of interest to many, but it is especially important for summer residents. It is not uncommon for people not to go to their privatized plots for one or two seasons, or even more. This happens for various reasons, and it is not always possible to get to the house in whichhoused the board of the partnership and pay the required amounts.

Collection of membership fees is carried out in court. This means that the following can be recovered through the court:

• unpaid dues;
• delay pen alties;
• pen alties, if provided for by the charter.

However, these measures against debtors are not always taken. Recovery in court is carried out only after a decision has been made. Accordingly, in order for the court to make such a decision, members of the board of the horticultural community or leaders of another organization must come to the meeting and act as a plaintiff.

In practice, this happens extremely rarely, especially when it comes to small non-profit organizations, like interest clubs or country associations. As a rule, issues of non-payment of regular contributions are resolved without involving the judicial authorities, on the ground, that is, at meetings, if the procedure for such a case is not prescribed in the charter.

How can the debtor be affected by the community?

Membership fees are the material basis of the organization and, in principle, the only source of funds for the budget for many societies. This means that almost everything in an organization or community depends on regular payments. For example, if by a certain date it is required to pay a certain amount for electricity, and several people do not make their regular contributions, then either a debt is formed already withthe team as a whole, or the lack is spread to conscientious people.

In the first scenario in the above example, the size of regular membership fees will inevitably increase. This happens due to the fact that their components include pen alties accrued for delay or non-payment. Accordingly, it is more expedient to get the missing amount immediately, passing it through the accounting department as a target payment.

Of course, this state of affairs does not suit conscientious members of an organization or community at all. This is quite understandable, because not a single person wants to pay the amount of contributions for unscrupulous members of the team. For this reason, the issue of membership of debtors is inevitably raised at general meetings, of course, if the organization or the partnership, the community does not have a charter that spells out the procedure for debtors.

As a rule, unscrupulous members of the team are excluded from its ranks. The decision on this is made by a majority vote at meetings, of course, if there is no charter with a similar clause. If there is a charter and it states the exclusion of a community member due to non-payment of regular contributions, then there is no need to raise such issues at the meeting.