An unincorporated association is a group that does not have a separate legal personality of its own. Usually the group’s activities are limited to, for example, holding social or community events. Any possible liability can be dealt with by having adequate insurance cover. For example, a bridge club might meet on a weekly basis in a local hotel. The hotel’s public liability insurance will cover accidents happening on its premises. The bridge club organisers will incur any other liability, but the club’s insurance policy should cover that sufficiently. The advantages of an unincorporated association are that it is relatively easy and inexpensive to set up, it is suitable for small organisations and the amount of regulatory requirements it has to deal with is minimal.
The disadvantages are that the members of the association may find themselves personally liable for the actions or debts of the association. The association may also have difficulty establishing its credibility and entering into contracts, particularly if it wishes to employ staff or lease property. Where an unincorporated association structure is appropriate, it is quite possible for a group of people to come together and undertake activities simply by verbal agreement. However, this is likely to be quite limiting. How can you confirm what has been agreed? How can you expect other people to take you seriously? Will a bank allow you to hold an account?
It is therefore a good idea to draw up a written constitution outlining the aims, activities and rules for running your group...
It is therefore a good idea to draw up a written constitution outlining the aims, activities and rules for running your group. The Revenue Commissioners have produced a standard template for a constitution.
A constitution will clarify issues such as:
- Who can be a member of your group?
- How does a person become a member?
- Is there any circumstance under which a person can have their membership taken away from them?
- Would the person losing their membership have a right to appeal?
- How often are meetings of the members held?
- How much notice of meetings should be given to the members?
- What is the quorum?
- Who has the right to vote?
- How will the management committee be elected?
- How often will the management committee meet and what will be the quorum?
- Are there any restrictions on how many terms a person can serve on the management committee?
- Can the management committee delegate any of its work to subcommittees?
This is a structure where a number of people, known as ‘trustees’, are appointed under a legal document known as a ‘deed of trust’, usually in order to hold and administer funds or property on behalf of a group/beneficiaries. This does not confer legal status on the group and, given that the power rests with the trustees, the structure is considered to be less appropriate for community based organisations. Trust law is also complex and may require the need to engage professional assistance. However, it may be useful if a number of organisations wish to buy premises together or for smaller charities, where a property or properties are held for particular charitable purposes and overseen by the trustees.
A charitable body that is a trust can, in theory, apply for incorporation under the Charities Acts 1961 – 1973 through the Commissioners of Charitable Donations and Bequests in Ireland, but this is very expensive and very rare.
A friendly society is a mutual association for its members. There are three types of ‘friendly society’, all regulated by the Registrar of Friendly Societies. The one which is generally charitable in nature and applies to voluntary associations, is known as the ‘benevolent society’ which has a governing document known as the ‘rules’. It does not provide a separate legal entity. It is very little used, with only around a dozen such societies registered.