Key Takeaways

  • A professional organization is a group of individuals from the same industry who collaborate to promote standards, provide resources, and support career development.
  • There are multiple types of professional associations, including member-benefit groups, designation-granting bodies, and regulatory entities.
  • Joining a professional organization can enhance networking, learning, and leadership opportunities.
  • Forming a professional association requires defining a mission, legal structure, benefits, and management model.
  • Tax advantages and limited liability are significant benefits for members of a professional association.

Forming a professional association is done within an industry to help partner organizations reach educational, social, or legislative goals. This strategy creates a larger coalition so business owners can have a voice on issues that affect their livelihoods. All individuals who participate in professional organizations must be licensed to provide the service in question, such as medicine or law. Professional associations are governed by state and federal law.

Choose Your Mandate

First, you'll need to consider the answers to several questions about your fledgling organization.

  • Who will act as the initial board members? Ideally, this should be an odd number of individuals who are recognized in diverse areas of your industry. They should also have plenty of money and time to offer the association.
  • What is the name of the association and what purpose will it serve? This can be the first decision of the new board.
  • What is your mission statement? This should incorporate both the purpose and the benefits you'll offer your members. It should have a vision for items the association will accomplish, but be broad enough to last for years. Aim for a mission statement that is just one or two sentences long.
  • Who are your target members? How many members do you want to have?
  • What other industry associations exist? Research the satisfaction of their members, the benefits they offer, and the amount they charge for dues.
  • Should we incorporate? Most associations choose to do so, which requires them to submit annual meeting minutes and follow other administrative guidelines. To incorporate, your association must register with the office of the secretary of state.
  • Should we seek tax-exempt status? Business leagues are exempt from federal income tax under 501(c)(6) and can engage in legislative activities such as lobbying. Scientific and educational groups cannot conduct political activities, but are exempt from federal and most state and local taxes under 501(c)(3). Donations are tax-deductible for the donors.
  • What is the budget? This should include the total income from membership dues, the amount and structure of dues, non-dues income such as donations, and annual expenses.
  • What services and benefits will the association provide? This should include all items covered by member dues, including group insurance, discount meeting registration, publications, lobbying efforts, and product discounts. It should also cover benefits members must pay extra for, such as meals, meetings, and registration fees.
  • What are the association's bylaws? This legally binding document defines the group's structure and administration and provides a guideline for processes and procedures. You may need to submit bylaws when applying for tax-exempt status, so look to the bylaws of similar organizations and/or consult an attorney for assistance in drafting them. This document should include membership categories, qualifications for membership, board members and their roles, terms of board members, election procedures, and benefits and services.
  • What is the association's management structure? Some professional associations are completely run by a volunteer board, sometimes with the help of one or two full-time employees. Stand-alone associations are administered by a large staff. Some hire a management company to take care of payroll expenses and other administrative details.

Types of Professional Organizations

Professional organizations typically fall into one of the following categories, each serving different functions in their respective industries:

  1. Member-Benefit Associations
    These groups are designed to provide resources, support, and networking opportunities for their members. They often offer conferences, training sessions, and exclusive access to publications and industry news.
  2. Designation-Granting Associations
    These associations provide certifications or credentials that help establish a member’s expertise and professional standing. They usually set the standards for continuing education and ethical practices.
  3. Professional Regulatory Bodies
    Regulatory associations ensure compliance with industry standards and may be involved in licensing and disciplinary actions. They help maintain public trust in the profession by enforcing high ethical and professional benchmarks.

Understanding what type of professional organization you’re forming or joining can help clarify its role and strategic focus.

Professional Association Benefits

A professional association can retain advantageous pass-through taxation while avoiding the liability and self-employment tax of a partnership or sole proprietorship. It can also deduct many operational expenses.

For example, while the latter business entities can only deduct part of their sizable health insurance costs, professional organizations can deduct the full cost of health and accident insurance for their employees and families. This will offset the cost of the policy.

In some cases, professional associations can deduct their expenses for disability and life insurance for employees.

Professional associations can also deduct up to 80 percent of dividends it receives from domestic corporations. Sole proprietors and partners must include all dividends on their income tax statement.

Members of the professional association have limited liability for business activities and malpractice of other members, partners, and employees. Each professional is responsible only for his or her own business actions.

This type of business allows professionals to take advantage of all these benefits and others at a minimal startup cost.

Best Practices When Starting or Joining a Professional Organization

Whether forming or joining a professional organization, following these best practices can maximize your impact and involvement:

  • Attend Events Before Committing: Participate in public meetings or networking events to evaluate fit and member engagement.
  • Review Leadership and Governance: Understand the board structure and transparency of decision-making.
  • Examine Member Benefits: Compare what’s included in the membership fee—such as insurance plans, certifications, or publications.
  • Verify Compliance and Credibility: Ensure the organization complies with industry and legal standards.
  • Set Clear Membership Goals: Whether for networking, continuing education, or advocacy, knowing your objective helps you engage meaningfully.

If you're forming an organization, consider consulting an attorney to structure your bylaws, incorporation documents, and tax-exempt status filings appropriately. You can find a qualified attorney on UpCounsel for support.

Why Join a Professional Organization?

For individuals, joining a professional organization can be a powerful step toward advancing their careers. Some of the key reasons to become a member include:

  • Networking: Access to industry professionals, mentorship opportunities, and professional contacts.
  • Skill Development: Many organizations offer workshops, certifications, and educational events to help members grow.
  • Industry Advocacy: Members contribute to shaping policies and advocating for the profession.
  • Professional Recognition: Credentials or affiliations with respected organizations enhance credibility.
  • Job Opportunities: Some organizations host job boards or share exclusive job listings with members.

These associations also serve as platforms for community engagement and peer collaboration, which can be especially valuable in highly regulated or rapidly evolving industries.

Frequently Asked Questions

  1. What is a professional organization?
    A professional organization is a group of individuals from the same industry who come together to promote professional standards, provide resources, and support each other’s career development.
  2. What are the different types of professional organizations?
    They include member-benefit associations, designation-granting bodies, and professional regulatory agencies—each with different goals and functions.
  3. Do professional organizations require membership fees?
    Most do. Fees typically fund events, publications, training, and administrative costs. Member benefits often outweigh the cost.
  4. Can professional organizations influence legislation?
    Yes, many professional associations engage in lobbying and advocacy to influence industry-related legislation and regulations.
  5. What are the legal steps to start a professional organization?
    You’ll need to define your mission, establish a board, draft bylaws, decide on incorporation, and potentially file for tax-exempt status under 501(c)(3) or 501(c)(6). Consulting an attorney is recommended.

If you need help with forming a professional association, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.