Yes, it is possible to open a bank account for a Private Membership Association (PMA), but it often requires specific documentation and a tailored approach because PMAs operate in the private domain rather than as standard, public-facing corporations.
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Banks generally treat PMAs as unincorporated associations, clubs, or societies.
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Resource Centre
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Key Steps and Requirements
To successfully open a bank account for a PMA, you will likely need the following:
Employer Identification Number (EIN): A federal Tax ID number is usually required, even if the association is not registered with the state.
PMA Documents: Banks will often require a copy of your by-laws and a Certificate of Execution (or Articles of Association).
Membership Agreement: Evidence that the organization is private and operates through contractual agreements with its members.
Signatory Information: Valid identification (Passport, Driver’s License) and proof of address for all authorized signers.
Resolution to Open Account: A formal document signed by officers authorizing the opening of the account and designating signers.
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Recommended Banking Approach
Use Specific Terminology: When speaking with bank representatives, describe the entity as an "unincorporated association" or "non-profit association".
Target Credit Unions or Small Banks: Smaller local banks and credit unions are often more familiar with local groups and associations and are generally more supportive of private member associations.
Avoid "Public" Terminology: Do not describe the PMA as a public business, corporation, or LLC, as this will trigger requirements for state registration documents that a private association does not have.
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Alternative Solutions
If a bank refuses to open an account in the name of the PMA, you may consider:
Fiscal Sponsorship: Using a "fiscal host" that can hold funds on behalf of your group.
Unincorporated Association Account: Some banks, such as Wema Bank or FCMB, have specific "Savings Account - Non-Individual" or "Community Account" products designed for unregistered clubs.

Setting up a bank account for a Private Membership Association (PMA) typically requires acting as an unincorporated association, utilizing an Employer Identification Number (EIN), and submitting a constitution, bylaws, and a formal board resolution to a bank or credit union. Credit unions and local banks are often more supportive of PMAs than large commercial banks, allowing for tailored "unincorporated entity" accounts.
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www.zenithbank.com
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Essential Steps and Documentation
Obtain an EIN: Secure a Tax Identification Number (EIN) from the IRS to identify your association without using personal Social Security Numbers.
Create a Resolution: Formalize a board resolution that authorizes the opening of the account and appoints signatories.
Draft Governing Documents: Prepare your association's Constitution, By-laws, or Articles of Association to prove legitimacy.
Prepare Required Documentation:
Completed application form.
Passport photographs of signatories.
Valid identification for all authorized signatories.
Letters of introduction or references.
Select a Bank: Look for banks that specialize in "clubs and societies" or community organization accounts. Credit unions are often considered good partners for PMAs.

Key Tips for PMA Banking
Terminology: Identify the organization as an "unincorporated entity," "religious organization," or "non-profit association" to ensure proper categorization, as some banks may not understand the specific term "PMA".
Focus on Documentation: Some advisors suggest focusing on bylaws, meeting minutes, and the EIN, rather than showing detailed Articles of Association.
Consider Alternatives: If a traditional bank is difficult to open an account with, consider a fiscal host, which can act as a bank for specialized groups.

In opening a bank account, the best words to use are: unincorporated entity, and religious organization or church, or ministry.  Let them know your EIN number, many banks will like to have the founder's Social Security numbers in order to set up the account.

Many credit unions like to know their members and are very supportive of private member associations.  They will like to see a copy of your by-laws and certificate of execution.  Usually, they will keep a copy of these in your file.  The Articles of Association are internal documents, we as advisors suggest to not show them to the bank.

Understanding The Private Membership Association Model: Benefits and Challenges
Understanding The Private Membership Association Model
August 27, 2024 | Andrew Lawlor

It’s natural to have concerns about adopting a private membership association (PMA) business model.

For instance, will this model offer sustainable benefits? Could it potentially harm your revenue or reputation? Are there financial drawbacks and challenges?

Like every other business out there, private membership associations have their pros and cons.

When executed well, embracing a private membership model could strengthen your business. Creating an exclusive community, legal flexibility, and a sense of self-control are just a few of the advantages of a membership organization.

In this blog, we’ll dive into the pros and cons of PMAs and explore how this approach could transform your business.

What is a private member association (PMA)?
A private membership association (PMA) is an organization or group that operates as a private entity, offering services, products, or benefits exclusively to its members.

Unlike public services, PMAs operate strictly on a membership basis in a private domain, allowing only approved members to participate.

Private associations can take many forms, from professional associations and trade unions to social clubs and health cooperatives. Some even offer tiered membership levels depending on member needs and purposes.

These associations often operate under different legal frameworks than public businesses, giving them more flexibility in structuring their operations and engaging with members.

More on association membership management here.

Members of a private membership association networking with each other at an exclusive event.

Common membership structures
Membership structures are of various types, depending on the members’ needs and the stakeholders involved. These include:

Individual membership where members are individuals, often professionals or enthusiasts in a particular field or industry
Organizational membership: Members include companies, nonprofits, or educational institutions
Hybrid membership: This membership structure combines both individual and organizational memberships, where individuals and organizations can both join
Examples of private membership associations (PMAs)
Professional Associations: Examples include the American Medical Association (AMA) and the American Bar Association (ABA) that provide networking opportunities for doctors and lawyers respectively
Health and Wellness Associations: Life Extension Foundation and Optimum Health Institute are examples in the health category, offering members access to healthcare programs, personalized wellness plans, and wellness retreats
Business and Trade Organizations: Examples include the National Federation of Independent Business (NFIB) and Young Presidents’ Organization (YPO)
Check out Aptaria’s industry-wide association management solutions here.

The pros of a private membership association
Thinking about starting a private membership association (PMA) can feel like a big decision. You’re probably wondering if it’s worth the effort, right? Let’s break it down by looking at some of the major perks that come with a PMA.

1. Exclusive access and member loyalty
Members of private membership associations get exclusive benefits that are not accessible to the general public. That’s one of the biggest upsides of a PMA. When people know they’re part of a special group with unique perks, they tend to stick around.

Beyond servicing, it’s about building a community where members feel valued.

2. Legal and operational flexibility
Here’s a less obvious but powerful benefit — PMAs often operate under a different set of rules than public law.

This means more flexibility in how you run things. It might also mean fewer licensing headaches or marketing restrictions, giving more room for innovation without usual interference.

3. Networking and collaboration opportunities
Private membership associations are like magnets for like-minded people and businesses. By bringing everyone together, you create a space for new ideas, partnerships, and opportunities. The connections you make through a PMA can sometimes be just as valuable — if not more so — than the direct benefits of membership.

Achieve your membership association goals with Aptaria.

Five members of a private membership association sitting at a desk, discussing collaboration opportunities.

4. Enhanced Value Through Tailored Communication
A key advantage of running a private partnership association is the ability to offer personalized value to your members.

As a best practice, ensure your members feel like they are receiving something unique and valuable. This will make them more likely to remain loyal to your association.

One way to do this is through high-value content. Think targeted email campaigns and exclusive newsletters that address their specific interests and needs — content that isn’t available in the public domain.

By focusing on clear public interest topics and providing insider information, you’re sure to boost member engagement and the perceived value of the membership.

5. Sense of control
In public groups, members don’t really get to contribute to decision-making directly.

However, fellow members of a PMA often have an influential role to play in discussions and decisions, making you feel like you own a part of it.

Members can actively participate, share their opinions, and suggest ideas, contributing to a stronger sense of self-control and satisfaction with the association’s direction.

6. Self-advocacy
Private membership associations empower members to advocate for their own interests through free speech.

Whether it’s pushing for industry changes, shaping public policy, or simply having a collective voice, a PMA gives members a platform to speak up and make their voices heard when they need help. This kind of self-advocacy can lead to real, impactful change that benefits everyone involved.

The cons of a private membership association
Of course, it’s not all sunshine and rainbows. Running a PMA comes with its own set of challenges. Here are some of the potential downsides to consider:

1. Membership management challenges
Managing a growing membership base can quickly become overwhelming. Keeping up with member data, staying in touch, and consistently delivering value isn’t easy.

However, investing in the right technology can combat these challenges.

For instance, a robust customer relationship management (CRM) by Salesforce can make managing growing memberships easier. You can seamlessly update members about the perks, latest events, and ongoing programs.

Salesforce for PMAs — Check out Aptaria’s solution here.

2. Ambiguous legal areas
While private membership associations do enjoy some legal perks, they’re not completely off the hook. There are still laws and regulations to follow, especially around member privacy and maintaining non-profit status (if applicable).

Furthermore, because of the legal status gray areas, PMAs may face thorough scrutiny by regulatory authorities.

To be on the safe side, be sure to be updated about all legal compliances to avoid headaches regarding legal, fines, or even damage to your reputation.

3. High operating costs
Starting (and running) a PMA can be an investment in the long run. Legal fees, administrative expenses, and operational costs add up and could be hefty.

And since membership associations have fluctuating funds (from sponsors and donors), meeting these costs regularly can become a financial burden.

4. Potential for exclusion
Exclusion is a double-edged sword. While it can drive loyalty and unique perks, it can create a sense of elitism and exclusivity when not executed properly.

For instance, if a potential member doesn’t meet the required membership criteria, they might feel excluded. This will in turn affect how your association is perceived and slow down your association’s growth.

5. Risk of creating echo chambers
Private membership associations can sometimes create echo chambers where similar viewpoints dominate.

In these environments, members may be surrounded by like-minded individuals, leading to confirmation bias. This bias makes them resistant to new ideas or differing opinions, stifling creativity and hindering innovation.

In these cases, lack of diverse perspectives leads to intellectual stagnation. Without exposure to alternative viewpoints, members may overlook valuable insights that could propel the association forward.

Final thoughts
Private membership associations offer a unique way to create tight-knit communities and deliver exclusive perks to your members.

By analyzing the private membership pros and cons and taking a smart approach to your PMA, you can set up a membership association that not only retains members but also pushes your business toward long-term success.

Yes, you can open a bank account for a Private Membership Association (PMA) in the U.S., but it often requires specialized handling as banks may not have a specific "PMA" category. You will typically apply for a "Club," "Society," or "Unincorporated Association" account, ideally using an EIN (Employer Identification Number) obtained from the IRS.
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Steps to Open a PMA Bank Account:
Obtain an EIN: While not always mandatory for small, unincorporated groups, an EIN from the IRS acts as the tax ID for the association, making bank onboarding much easier.
Choose the Right Institution: Local credit unions or community banks are often more supportive of PMAs than large national banks.
Prepare Documentation: Be ready to provide your Articles of Association (or similar governing document), By-laws, and Minutes authorizing the account opening.
Identify Officers: Banks will need the names, IDs, and Social Security numbers of the signers, typically the treasurer and chairperson.
Use Proper Terminology: When asked for the business type, refer to it as an "unincorporated association" or "nonprofit organization" rather than a corporation.
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Key Considerations:
Unincorporated Status: If the PMA is not legally incorporated, it may not have legal capacity, which could lead to tighter scrutiny.
Liability: Be aware that in many states, members of an unincorporated association may share liability for the association's activities.
Bank Policies: Banks may require a "secretary certified copy" of your organization’s constitution or bank resolutions.