Starting an unincorporated association is quite simple because you don’t have to face the legal hurdles you’re likely to encounter when starting a business or a limited company. In fact, some unincorporated associations are formed without the members even realizing it.
To start an incorporated association, you just need to bring two or three members together and determine the agreed-upon rules and responsibilities of each member. But before you start, it’s important to understand what an incorporated association is and how exactly it operates.
An unincorporated association is a group or organization arising from the coming together of two or three individuals for a specific purpose without following the formal structure of forming a company. Common examples of unincorporated associations include societies, trade unions, clubs, syndicates, and voluntary groups.
Unincorporated associations are very popular because they eliminate the protracted legal processes you have to follow to set up a company. They also give you the freedom to operate without the risk of getting into legal trouble. For instance, an incorporated association doesn’t have to submit its annual tax returns.
However, your unincorporated association has to operate and be managed properly just like a real company. For example, you have to set rules, regulations, and responsibilities for every member. This includes electing leaders, executives, and other individuals with leading roles.
This is why you must leverage the latest technologies to manage and run your association. For example, you can take advantage of the available online association voting systems, like ElectionBuddy, to make the voting processes fast and seamless.
You should also implement association management software to help you manage your association’s activities more effectively. But what is association management software (AMS), and how does it work?
An AMS is a software product designed to integrate critical systems in your association, including finance, web builder, event management, communication, and member data management systems. It brings all these systems into a single platform where everything can be monitored and managed.
Here are the simple steps to follow when forming an unincorporated association:
The first consideration you have to make when forming an unincorporated association is the type of unincorporated association you want to start. For example, if you want to start a trade association, you should know how a trade association differs from a labor union.
Once you’ve determined the type of association you want to form, you need to develop its constitution. This is the document that contains the rules and regulations of the association. A constitution helps the association to run smoothly by defining the parameters that every member should operate within.
You can either write the constitution yourselves or hire a lawyer to draft it for you. Your association’s constitution should have some key elements, including management provisions, membership rules, the process of changing the rules, and the registration of the association.
You’ll also need to define the goals of your association. This can be in the form of a mission statement that reminds every member why the association was formed; it can also help members to remain focused on the association's primary goal.
In most unincorporated associations, it’s not practical for every member to vote on each decision the association makes. So, you should elect a management committee to run the association on and make certain decisions on behalf of the members.
This committee is usually voluntary and its authority should only flow from the association’s constitution. Because every member subscribes to the constitution when they sign up, their elected management committee members become their agents.
It’s also important to determine how the members of your management committee will be appointed and the powers they’ll have. With an online voting system like ElectionBuddy, you can hold elections in your association effortlessly because this system allows members to vote from wherever they are, while also ensuring that the election is completely accurate and secure.
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