I'm organizing a hackathon this summer and my team and I have had a lot of fun bootstrapping the whole process. In fact, we enjoyed it so much that we tossed around the idea of making the organization "official". We're all new to this, so naturally we had some concerns:
Does this mean we need to register the organization as a business? I live in Canada and was thinking I should register it as a sole proprietorship -- but is that even necessary (given the requirements outlined above)? We also need to trademark our name.
What worries me is handling and accepting money from sponsors. Do you need to be a business to do that? I'd appreciate any advice the community here could give me.
Two questions need to be addressed, is it an enterprise or an activity?
The point about an enterprise, is that it lasts beyond the lifespan of the founders. With a more ad-hoc group, there are various platforms out there (eg Meetup.com) that do all the necessary fiddly bits. If you are asking whether it should be a business, then either you are anticipating growth or you want to limit your potential losses (eg public liability insurance). Trademarks can be owned by anyone include collective groups.
accepting money from sponsorswho negotiates and (more importantly) performs the contract (if any)? There are a lot of different models, from unincorporated society (aka club) to Co-operative (collective of independents/freelancers) to low-profit limited liability companies (with a stipulated social objective). A sole proprietorship by law is to put certain boundaries around work and personal space, but then paperwork suddenly starts rearing head including taxation. I suggest you need to assess the amount of group activity v personal commitment before doing the legal legwork.