Definition of trade association
A trade association is defined as a membership organization of persons engaging in a similar or related line of commerce, organized to promote and improve business conditions in that line of commerce and not to engage in a regular business of a kind ordinarily carried on for profit, and no part of the net earnings of which inures to the benefit of any member.
Its restricted class for solicitation purposes includes:
- Noncorporate members (such as individuals and partnerships) of the association;
- The association’s executive and administrative personnel;
- Executive/administrative personnel and stockholders of member corporations (with prior approval); and
- The families of all three groups.
As with other membership organizations, members of a trade association must fit the definition of “member” in order to be in the solicitable class.
Corporate members of trade associations
Parent and subsidiary member corporations
If a parent corporation is a member of the trade association but its subsidiaries are not, then the trade association may solicit (with prior approval) the restricted class of only the parent.
Likewise, if a subsidiary corporation is a member of the trade association but the parent is not, then the trade association may (with prior approval) solicit the restricted class of the subsidiary only; the parent’s restricted class is not solicitable. If both corporations are members, then both restricted classes are solicitable.
Nonstock corporate member
A trade association may (with prior approval) solicit the individual members of a member non-stock corporation. Moreover, in the case where a trade association is affiliated with a non-trade association membership organization, either organization may solicit contributions to its SSF from the members and owners and from executive and administrative personnel of the trade association’s incorporated members.