[Project now completed]
Gillian Swanson, Project Manager
Garry MacLean, Legal Assistant
We published our Report on Unincorporated Associations (Scot Law Com No 217) in November 2009. It clarifies the law affecting tens of thousands of non-profit making associations (including many charities) and clubs in Scotland. A news release is also available.
The Scottish Government gave their initial response to the Report in March 2010.
In Scotland, and indeed throughout the United Kingdom, unincorporated associations are not recognised as entities separate from their members. Consequently, such organisations cannot carry out acts such as entering into contracts, owning property or engaging employees. The lack of legal personality can also give rise to unfortunate, and perhaps unforeseen, repercussions for members. For example, it is possible that, under the current law, a member of an unincorporated association could, by virtue of that membership alone, find himself or herself personally liable in delict to a third party injured at an event organised by the association. Further difficulties relating to this area of the law are set out in our Discussion Paper on Unincorporated Associations (DP 140) which was published at the end of 2008.
Our Report recommends a simple regime, with the minimum of administrative burdens, to ensure that associations and clubs are recognised as legal entities. Separate legal personality will be accorded to associations which satisfy certain conditions. The main conditions are that the association has at least two members; that its objects do not include making a profit for its members; and that it has a constitution containing certain minimum specified provisions. These provisions are: the association's name; its purpose; membership criteria; the procedure for the election or appointment of those managing it; the powers and duties of its office-bearers; the rules for distributing its assets if it is dissolved; and the procedure for amending its constitution. Many associations will already have constitutions which contain these provisions but, for those which do not, we anticipate that style constitutions will be made available, free of charge, on the websites of organisations such as the Scottish Council for Voluntary Organisations.
To ensure that as many associations as possible benefit from the reforms, we recommend that all associations which meet these criteria should be treated as separate legal entities unless they resolve to opt out.
The recommendations also address the protection of those who might have contractual or other dealings with an association with separate legal personality; for example, such an association will be required to disclose its name and official address on documents and publications and certain documents must be made publicly available on application to that address.
As the law of unincorporated associations is a reserved matter, legislation implementing our recommendations will require to be passed by the United Kingdom Parliament.
Page archive date: 26 November 2009