Most, if not all yacht clubs are incorporated under the laws of their jurisdictions, either as not-for-profit corporations or membership corporations depending on the title used in state law.

 

A corporation is a separate entity under the law.  Members of corporations have no liability for the most part, either for negligent acts of the corporation or the debts of the corporation.  Obviously, they can be sued individually for acts which they themselves commit -- such as pushing an unsuspecting victim into a swimming pool -- but that liability does not affect other members.  Similarly, officers and directors are not personally liable for their decisions provided they act in "good faith" with the care of an"ordinarily prudent person" in a manner which they "reasonably believe" is for the good of the corporation.  Please note that "good faith," "ordinarily prudent person" and "reasonably believe" are terms which lawyers call "words of art."  Don't assume you know or can decipher the meanings of those phrases.  When you have a question, see your lawyer. 

 

The fact that a club is incorporated under what a state legislature calls a "Not-For-Profit Corporation Law" does not mean the club is prohibited from making money from any of its events.  In this instance, "not-for-profit" are more words of art which mean that no part of the funds inure to the benefit of any one member.  The Internal Revenue Service has its own rules for determining what is exempt income and how much of the club revenue is profit.