Incorporation is a certainly a good step to consider business-wise, primarily because it does offer some protection to the officers in terms of their personal assets in the case of a lawsuit. But I don't want readers to think it's a required step in the process. In some states it is too cumbersome or expensive; or the organization may have already filed for 501(c)(3) status without that step and doesn't want to start over.
Incorporation isn't necessary to prove independence. An unicorporated association can also be totally independent from the school.
Also - let's not leave anyone thinking it's a total magic shield. Yes, it helps. But as officers of the organization, you DO still bear some risk, especially if the organization isn't operating legally or there's fraud or some other problem at the leadership level, etc. I don't want to scare anyone away, because those issues are very rare. But nor do I want folks to think incorporating is complete protection. Best practices, following rules/laws, having appropriate insurance all mitigate any organizational risks.
At one point I belonged to a PTO that DID make more the $5000 per year, operated with great intentions, but had no plans to formalize. I was prepared to participate as a parent, donating time and and supplies when asked. However being as well versed as I am in how it's supposed to work, I wouldn't be an officer or take a leadership role.
I'm not sure how much more valid advice we can offer unless the original poster returns to add information as to WHY the presdient won't be on the bank account or what the structure of the PTO is.
So the point is, if this PTO is incorporated, then I don't see any reason why the PTO shouldn't have their own account.
If the PTO is not incorporated, then my recommendation would be to look into becoming independant, for many different reasons. One of which is the protection of the officers that comes with it.
Maybe the PTO president is reluctant because she's afraid of being held liable if the PTO is sued or if $$ is misapporpriated. If the PTO is incorporated, the officers are not at personal risk. And if the officers are bonded, even better.
If the PTO is independant, as it sounds (otherwise why would the Principal be looking to separate the accounts?), then without a doubt the accounts should be separated. I don't see why the PTO President would be so reluctant to do this as it protects the group. I would never want my school's Principal to have the authority to sign our checks.
You do want a tax identification number (EIN) to open the bank account rather than using an individual's social security number. That number is issued by the IRS.
But your ability to have a bank account has nothing to do with whether your organization is incorporated or not. The PTO can be independent of the school whether or not it's ever applied for incorporated.
Whether or not to have a school employee (especially the principal) is an organization by organization decision. That's the part that has opinions on both sides.
IF your PTO is set up with its own Tax Identification number and is recognized by your state with a Certificate of Incorporation, then they can set up their own account. Typically, the Treasurer and President are co-signers on the account. You should really have two and it shouldn't be a school employee.
I don't know why the President wouldn't want to be on the account, its still the Treasurer that is ultimately responsbile for the account and its transactions. However, your Vice President can step up in the event your President cannot (that should be in the bylaws anyway for events or responsibilities).
