A voluntary or unincorporated association is a group of people who have decided to work together to accomplish a common agreed non-commercial purpose, such as a club, society, local group or community association.
A voluntary association is the simplest form of legal structure and is often appropriate for small scale activities which do not involve leasing premises or employing staff.
This structure is not regulated by an external regulator or subject to specific legislation, although some case law does exist. If it is charitable it will be subject to charity law and regulated by OSCR.
If you are considering this structure and are planning to apply for charitable status, why not consider setting up as a Scottish Charitable Incorporated Organisation? This is a corporate body which provides limited liability for its members and is suitable for organisations that want to become charities, but do not want or need the complex structure of company law.
- Little/no set up costs, least bureaucratic.
- Relatively cheap and easy to run.
- No formal registration requirements unless a charity, which will be accountable to OSCR.
- No detailed statutory procedures to be followed in relation to members’ meetings, etc.
- No requirement to notify any public register of the people serving on the management committee, unless a charity.
- No annual return to file with any public register, unless a charity.
- Can be a less intimidating structure for those considering whether to join as members or stand for election to the management committee.
- Does not have a separate legal personality so ownership of assets lies with individuals acting on its behalf, usually office bearers/management committee.
- Leases/formal contracts have to be entered into in names of office bearers. This can cause technical difficulties where there are changes in the people holding these offices.
- Legal proceedings cannot be taken by the organisation but only by individuals representing it. Similarly, legal proceedings would be taken out against individuals rather than the organisation.
- Management committee could be personally liable for debts if the organisation were unable to meet its debts and liabilities out of its own resources.
- Because it is a more informal structure, may be seen as “less professional” in the eyes of potential funders.
No annual return to file with any public register, unless a charity.
Can be a less intimidating structure for those considering whether to join as members or stand for election to the management committee.
How is it governed?
A voluntary association is governed according to its own rules, but if a charity, the constitution must be approved by OSCR.
It can be fairly informal, and is not legally required to have a written governing document or constitution. But it is good practice to have one and a prerequisite if a registered charity. A constitution should set out the organisation’s aims and objectives, who can join, etc.
You may choose to set up a voluntary association and register as a Scottish charity if the association meets the criteria for being a charity. Equally, you can set up a voluntary association without seeking charitable status.
Does it have a legal status, distinct from those who run it?
No. Some or all of charity trustees must undertake transactions on behalf of the body. Title to land and buildings must be held in the name of one or more individuals on behalf of the charity. Charity trustees may have personal liability for the charity’s actions and unlimited liability when it is wound up. This element of risk should be considered very seriously.
Write your constitution
You can download the SCVO model constitution and use it as the basis for your own organisation’s constitution. Remember that your constitution needs to be carefully drafted to reflect the aims which the organisation will be pursuing in practice, and its activities.
This model constitution reflects the features that are most commonly found in the constitutions of associations in the voluntary sector. The remainder of the constitution is drafted in such a way as to fulfil the normal requirements for a voluntary association seeking registration as a charity. If you are pursuing charitable status, your steering group will be limited in how far you can depart from the model. Those areas are identified in the detailed clause-by-clause commentary set out below.
Clause by clause guidance
Follow detailed clause-by-clause guidance on the model constitution; find explanations of what the clause is there for, whether it is required by law, and information about decisions to be made between alternative possibilities.
These are additional clauses you may want to use, again modelled on the most common variants within the sector. They cover such things as:
- Membership by incorporated and unincorporated bodies
- Co-opted charity trustees
- Some, but not all, elected charity trustees to retire each year
- Maximum period in office for charity trustees
- Outside body having right to representation on board
- Annual membership subscription
- Proxy voting
Forming the Voluntary Association
You should circulate the first draft of your constitution among the steering group so everyone has the opportunity to comment, and ensure any relevant outside organisations, the wider community and key partner bodies are brought into the process of finalising the constitution.
Applying to OSCR
If applying for charitable status, you should finalise the constitution before you submit it to OSCR, and before it is formally adopted.
The first meeting
Once the constitution is finalised, the process of forming your association simply involves convening a meeting of your steering group and formally adopting the constitution. The full name and address of each of the initial members of your management committee and the position within the association to be held by each (ie ‘chair’, ‘treasurer’ or simply ‘management committee member’, as appropriate) should also be inserted. Finally, each of the initial members of your management committee should sign the constitution, as additional members can readily be appointed after the association is formed. This simplifies the mechanics of obtaining signatures if the number is kept fairly small, though sufficient people should sign to form a quorum for the first meeting of the management committee.
Keep a copy
A final copy of the constitution should be carefully preserved. Each of the members of the management committee should be given a copy for future reference, and a copy should also be sent to any accountant engaged by the association.