Common rules applicable to private clubs include rules that the club be restricted to members and their bona fide guests, that the club be formed for a legal purpose and operated for the benefit of its members, and that the membership have input on the operations of the club, including selection of its directors. The club must meet regularly, and have a written membership policy and a membership review committee that reviews applications for membership which must remain on file.Continue Reading
A private club must normally derive sufficient revenue from its membership to cover its operating costs, but keep any profits from operations for the benefit of its members. The club must limit the size of its membership in keeping with its facilities, It must also issue some evidence of membership to its members and maintain an up-to-date list of members.
For the purpose of determining whether an organization can sell alcohol without registering patrons as a private club, North Carolina imposes additional rules that it charge a membership fee that substantially exceeds a fee charged for one-time use. The club must also offer facilities or activities other than those directly related to alcoholic beverages.
From a legal perspective, a private club is one that is not a public accommodation and is allowed to discriminate on the basis on an otherwise impermissible characteristic such as race. Federal law prohibits such discrimination in public accommodations, but recognizes the constitutional right of freedom of association for private clubs and permits them to discriminate on any basis of its choosing. The courts attempt to pierce the veil of private club status for establishments that attempt to use it for the sole purpose of racial discrimination and subjects rules related to private clubs to strict interpretation.Learn more about Managing a Business