Unincorporated Bodies

 

Unincorporated Association

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. Some 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. Any debts incurred by an unincorporated association can result in the members or the board being made personally liable for these debts or obligations.

An unincorporated association structure is appropriate and is recognised by the Charities Regulator as a suitable form for a charitable organisation.  Many smaller unincorporated associations do not have a Constitution or written rules, however, if it is a charity or applies to become a charity, the Charities Regulator requires the following to be set out in a written agreement:

  • The name of the association
  • Its aims and objectives which must fall under one of the primary charitable purposes of the Charities Act 2009
  • Details of its governing body, the Trustees, and the eligibility for same
  • The role, function and contractual arrangement of the members of the Trustees- The Charities Regulator requires there to be 3 unrelated Trustees
  • The appointment of the members of the Trustees
  • The terms of office of the members of the Trustees; and
  • The powers and duties of the Trustees.

The Charities Regulator will also want to see certain income & property clauses in the Constitution, these are available in the Common Requirements document at www.charitiesregulatoryauthority.ie

The Constitution should also 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 Trustees be elected?
  • How often will the Trustees meet and what will be the quorum?
  • Are there any restrictions on how many terms a person can serve as a Trustee?
  • Can the Trustees delegate any of its work to subcommittees?

The Constitution is binding between members of the organisation, but it has no legal effect in relation to non- members. Therefore anything done by the organisation is done by all members of the organisation who are responsible for all the activities of the organisation.

Trustees/Board/Management Committee

The Trustees – the organisations governing body and its members are bound by the objects of the charity and they are under a duty not to do anything that is outside the scope of the objects of the charity.

The trustees act as agents for the members of the charity and are normally authorised under the constitution to enter into contracts and arrangements that are necessary for the purposes or activities of the charity. Once the trustees act within their authority for furthering the purposes of the charity, then their decisions are binding upon the members. The trustees may be liable for the repayment of any debts that they have incurred on behalf of the charity and such debts can be met from the charitable organisation’s own funds unless the trustees have not acted prudently, lawfully and in accordance with the charitable organisation’s governing instrument.

Please see Forming A Charity Information Sheet for more details

Trust

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.

The statutory body who deals with legal Trusts, the Commissioners of Charitable Donations and Bequests in Ireland, has been incorporated into the Charities Regulatory Authority and should be contacted for further information.

Please see Forming a Charity nformation section / sheet for more details

Benevolent Society

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 not widely used, with only around a dozen such societies registered.