Unincorporated Associations
An unincorporated association is an informal organisation which may arise whenever several people join together, with the intention of creating legal relations, to carry out a mutual purpose otherwise than for profit.
The rules governing the members’ duties and liabilities will usually be set out in a written constitution, which is simply an agreement between the members as to how the organisation will operate. Usually the Constitution will provide for the election by the members of a management committee, which will be responsible for the everyday running of the organisation. The Constitution may also provide for members to have annual general meetings, to deal with business such as the accounts and the appointment of the management committee.
As the association is not a separate legal entity from its members, it cannot hold property in its own name. Any property which it controls will therefore have to be vested in an individual, or individuals, who are usually called the trustees of the association. They will hold the asset, subject to the direction of the members, or (more usually) the management committee.
Where an unincorporated association is a registered charity the members of the management committee may also be charity trustees. As such their role and responsibilities will be determined not only by the association’s Constitution but also by the general law relating to trusts and charities as referred to above.
Duties
The members of the management committee, and the trustees appointed to hold any assets for the association, must act within the Constitution, and must take reasonable care in exercising their powers.
Liabilities and Indemnities
Generally management committee members are liable for the acts or omissions of the organisation, but are entitled to an indemnity from the funds of the organisation if they have acted properly. If there are not enough funds, the committee members are personally liable for the shortfall.
Management committee members will have personal liability if they act outside the authority given to them or if they do not comply with the law.
It is possible (subject to the rules in the constitution) for insurance to be taken out, to cover trustees and members of the management committee for their potential liabilities. As with other outside bodies, Elected Members and Officers should satisfy themselves that the organisation has adequate insurance cover in this respect.