From a legal point of view, the most important element of a chapter membership agreement is the granting of a trademark license by the parent organization for the related chapter. The parent organization should assert trademark ownership and register federal trademarks with the U.S. Patent and Trademark Office. The agreement should also contain expectations regarding the governance and legal status of the chapter, such as the obligation for the chapter. B to keep a commercial bank account with proper accounting, properly file its Form 990 with the IRS and obtain its own liability coverage. However, the chapter model is not without risk. Poorly organized or poorly managed local chapters can quickly destroy the reputation of the senior organization, reduce the time and energy of its staff, and eventually make the organization accountable for chapter activities. Minimizing these risks and establishing a chapter structure that takes time requires preparation, communication and an agreement of belonging to the well-developed chapter (sometimes called the Charter of Chapters Convention). The relationship between a national organization and its chapters is supposed to be beneficial to both parties, but sometimes there are conflicts.
It is useful to lay a solid foundation for the relationship in a good chapter of the membership agreement. Here are the important elements. Given the changing legal landscape of personal data and privacy, the chapter affiliation agreement should contain provisions relating to the use and protection of personal data. If the senior organization has data protection and data security policies for the protection of membership data, the chapter should follow the same policies and protocols. In addition to the implementation of clear guidelines and standards, some partnership agreements include regular reports or meeting requirements. This allows the parent organization to review the latest activities of the chapter, provide timely support, discuss important policy positions, and maintain a good record of chapter activities. The most important protection of the parent organization is its right to revoke the chapter`s membership or otherwise change the role of the chapter (for example. B by imposing the merger of two or more chapters of different territories). Revocation is sometimes subject to notice or dispute resolution procedure. A revoked chapter must end the use of the parent organization`s trademarks, including, if necessary, by amending its corporate documents.