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. See also Federations of trade associations.
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.