Unincorporated Legal Forms
The most common unincorporated legal forms used by charities, social enterprises and co-operatives are:
- Unincorporated associations
What is an unincorporated association?
An unincorporated association is an organisation made up of a group of individuals, who have decided to come together for a particular purpose. The individuals are described as members of the association. It usually has a written constitution which sets out various details including how members are appointed and removed and how meetings are held amongst other things. An unincorporated association usually has a management committee elected by the members
Since it is unincorporated, it does not have limited liability. The individuals involved will be personally liable for the debts of the association.
What is a trust?
In the voluntary and community context, a trust is established when a donor gives an asset (usually money) to a group of individuals (trustees) and asks them to use it for a particular purpose. In general, for the trust to be legally enforceable, that purpose needs to be charitable. Charitable trusts are subject to slightly different rules from private family trusts.
The agreement between the donors and the trustees is set out in a "trust deed". This usually also sets out how the trustees are appointed and removed and how meetings are held amongst other things. A trust does not have members.
A trust is unincorporated and so it does not have limited liability. The trustees will be personally liable for the debts of the trust.