Legal Question in Administrative Law in California

You want to consult with a business attorney about the range of organizational structures that might accommodate your family association. You may need to have a corporate structure in place, but it need not be complicated. You will probably need to have a federal tax ID number and register with the state of California.

It is quite clear that your family organization is entitled to have a bank account if it is either an "unincorporated association" or a non-profit corporation. The former is covered in a part of the California Corporations Code, sections 18000 et seq., and such august organizations as the Episcopal Church operate as unincorporated associations.

The term "unincorporated" is not, however, synonymous with "unorganized." If your family organization decided that it were most appropriate to become an unincorporated association, its leadership should review CC 18000 et seq., perhaps with the assistance of a lawyer, and take the minimal organizational steps required or suggested by the code. Then, any bank with its act together should recognize it as a valid and desirable depositor.

Please note that it is not unusual for low to mid-level bank personnel to treat unusual forms of accounts in this unfriendly manner. The branch personnel have been given rules from higher up and are extra-careful not to breach them. Without more specifics, I'd guess that the bank people acted reasonably, but incorrectly, in demanding that your account become an individual account. To be more safe and certain, I'd advise that you become either a "formal" unincorporated association or, as you thought you might, a nonprofit corporation.

As to your eligibility to become a California nonprofit corporation. Please note that California law divides nonprofit corporations into three categories: (1) public benefit corporations; (2) mutual benefit corporations; and (3) religious corporations. Your concerns about your group's eligibility the become a nonprofit corporation seem to assume it must fit the requirements of a public benefit corporation. No. You probably can, if you wish, become a nonprofit mutual benefit corporation.

Please feel free to contact me directly if you'd like assistance in forming either an unincorporated association or a nonprofit mutual benefit corporation.