I went to this store where in order to buy merchandise, I need to have a membership card from them, but in order to get the membership card, I need to own a business. I found that some of the things that they sell are very cheap, so if I am able to get the membership card, I might be able to save a lot in groceries. But here is the thing: I do not own a business.

I was wondering, it is illegal/fraudulent to register a new business, just to be able to get the membership card from the store?

Assume that the business will not offer any services and will not sell anything (which I do not know if this is possible at all). It will solely exists to get the membership card from this store, and to get other business discounts.

  • In what sense is a business that provides no goods or services a business?
    – Dale M
    Jul 27, 2015 at 21:43
  • @DaleM You are completely right, there is no sense. My approach here is that the business will not be created to make profit or anything; it will be created just to get some benefits that otherwise cannot be received without owning a business.
    – scubaFun
    Jul 27, 2015 at 23:24
  • You may need to post the specific requirement to get a good answer. For example, one definition of business is "an activity intended to make money" which need not be a corporation or any other legal entity; it can be a sole proprietorship in which you yourself are the business. But that probably wouldn't satisfy the requirement here; what would?
    – phoog
    Jul 28, 2015 at 1:20
  • If you are talking about Costco's, in the UK they require not only that you have a business (which means you have to file your earnings with HMRC once a year), but also that you have a business account (which I could get from Barclays Bank for about £60 per year). You also need to be aware that they advertise prices excluding VAT, so unless you are VAT registered you actually pay 20% more.
    – gnasher729
    Oct 19, 2015 at 23:58

1 Answer 1


It seems unlikely, though I am not licensed to practice law in the United States and you should consult an attorney who is licensed in the relevant jurisdiction for legal advice.

Generally, to prove fraud, there must (among other elements) be a false representation of a material fact. Assuming that you have formed a business in accordance with the relevant laws, there is a business that you own. This satisfies the criterion that you have specified, i.e. that to get a membership card, you need to own a business. You have not falsely represented a fact about the business so far, since it exists in accordance with the law. There is no requirement in any jurisdiction which I am familiar with where a entity must engage in a certain level of trade to be considered a business.

This doesn't necessarily mean that you're good to go. This store may, as a condition of its membership, require that the business engage in a certain level of trade to be eligible for a membership card. If this is the case, and you obtain a membership card even though your business does not meet this level, then fraud may have occurred.

Finally, I should point out that incorporating a company does generally cost money, and the expected savings may not necessarily be worth it.

  • Not all businesses are corporations.
    – phoog
    Jul 28, 2015 at 1:22

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .