Voluntary association

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An annual general meeting of a typical small volunteer non-profit organisation (the Monaro Folk Society). Office bearers sitting are president, secretary and public officer. AGM Annual General Meeting of a typical small (141 member) volunteer organisation.jpg
An annual general meeting of a typical small volunteer non-profit organisation (the Monaro Folk Society). Office bearers sitting are president, secretary and public officer.

A voluntary group or union (also sometimes called a voluntary organization, common-interest association, [1] :266association, or society) is a group of individuals who enter into an agreement, usually as volunteers, to form a body (or organization) to accomplish a purpose. [2] Common examples include trade associations, trade unions, learned societies, professional associations, and environmental groups.

Contents

Membership is not necessarily voluntary: in order for particular associations to function correctly they might need to be mandatory or at least strongly encouraged, as is common with many teachers unions in the US. Because of this, some people use the term common-interest association to describe groups which form out of a common interest, although this term is not widely used or understood. [1]

Voluntary associations may be incorporated or unincorporated; for example, in the US, unions gained additional powers by incorporating. [3] In the UK, the terms voluntary association or voluntary organisation cover every type of group from a small local residents' association to large associations (often registered charities) with multimillion-pound turnover that run large-scale business operations (often providing some kind of public service as subcontractors to government departments or local authorities).[ citation needed ]

Differences by jurisdictions

In many jurisdictions no formalities are necessary to start an association. In some jurisdictions, there is a minimum for the number of persons starting an association.

Some jurisdictions require that the association register with the police or other official body to inform the public of the association's existence. This could be a tool of political control or intimidation, and also a way of protecting the economy from fraud.[ citation needed ]

In many such jurisdictions, only a registered association (an incorporated body) is a juristic person whose members are not responsible for the financial acts of the association. Any group of persons may, of course, work as an informal association, but in such cases, each person making a transaction in the name of the association takes responsibility for that transaction, just as if it were that individual's personal transaction. [4]

There are many countries where the formation of truly independent voluntary associations is effectively proscribed by law or where they are theoretically legally permitted, but in practice are persecuted; for example, where membership brings unwelcome attention from police or other state agencies.[ citation needed ]

History

Civil lecture at Budapest Brainbar Civil Brainbar (1).jpg
Civil lecture at Budapest Brainbar

Voluntary groups are a broad and original form of nonprofit organizations, and have existed since ancient history. In Ancient Greece, for example, there were various organizations ranging from elite clubs of wealthy men (hetaireiai) [5] to private religious or professional associations. [6]

In preindustrial societies, governmental administrative duties were often handled by voluntary associations such as guilds. In medieval Europe, guilds often controlled towns. [7] Merchant guilds enforced contracts through embargoes and sanctions on their members, and also adjudicated disputes. [8] However, by the 1800s, merchant guilds had largely disappeared. [9] Economic historians have debated the precise role that merchant guilds played in premodern society and economic growth. [10]

In the United Kingdom, craft guilds were more successful than merchant guilds [11] and formed livery companies which exerted significant influence on society. [12]

A standard definition of an unincorporated association was given by Lord Justice Lawton in the English trust law case Conservative and Unionist Central Office v Burrell (1981): [13]

"unincorporated association" [means] two or more persons bound together for one or more common purposes, not being business purposes, by mutual undertakings, each having mutual duties and obligations, in an organisation which has rules which identify in whom control of it and its funds rests and upon what terms and which can be joined or left at will. [14]

In most countries, an unincorporated association does not have separate legal personality, and few members of the association usually enjoy limited liability. [15] However, in some countries they are treated as having separate legal personality for tax purposes: for example, in the United Kingdom an unincorporated association is assessable to corporation tax. However, because of their lack of legal personality, legacies to unincorporated associations are sometimes subject to general common law prohibitions against purpose trusts.

Associations that are organized for profit or financial gain are usually called partnerships. [16] A special kind of partnership is a co-operative which is usually founded on one person—one vote principle and distributes its profits according to the amount of goods produced or bought by the members. Associations may take the form of a non-profit organization or they may be not-for-profit corporations; this does not mean that the association cannot make benefits from its activity, but all the benefits must be reinvested. Most associations have some kind of document or documents that regulate the way in which the body meets and operates. Such an instrument is often called the organization's bylaws, constitution, regulations, or agreement of association. [17]

Common law

England and Wales

Under English law, an unincorporated association consists of two or more members bound by the rules of a society which has at some point in time, been founded. [18]

Several theories have been proposed as to the way that such associations hold rights. A transfer may be considered to have been made to the association's members directly as joint tenants or tenants in common. Alternatively, the funds transferred may be considered to have been under the terms of a private purpose trust. Many purpose trusts fail for want of a beneficiary and this may therefore may result in the gift failing. However, some purpose trusts are valid, and, accordingly, some cases have decided that the rights associated with unincorporated associations are held on this basis. The dominant theory, however, is that the rights are transferred to the members or officers absolutely, perhaps on trust for the members, but are importantly bound by contracts inter se . [19]

Accordingly, on dissolution, the distribution of these rights depends on how they were held. A purpose trust may by its nature survive the dissolution of the association, or it may not. If it fails as a result of the dissolution, then the rights will be held on resulting trust for the contributors, unless they can be shown to have renounced their right to such a trust in their favour. If the rights are held subject to contract, then they will be divided among the surviving membership upon dissolution, according to the terms of the contracts inter se or an implied term according to contribution. If, as a result of this contract or statute, no member can claim, the rights will pass to the Crown as bona vacantia . This conclusion has also been suggested where the association dissolves because only one member remains, although this has been doubted by some commentators who believe the last members should be entitled to the rights. [19]

Scotland

Scottish law on unincorporated associations is essentially the same as English law. [20]

United States

Each state sets its own laws as to what constitutes an unincorporated association and how it is to be treated under the laws. In the United States, voluntary associations which were incorporated were "pre-eminent" in collective action. [21]

Australia

In most states and territories in Australia, a similar set of laws allows not-for-profit associations to become legal entities with a limit to the liability of their members. An example of such a law, the Associations Incorporation Act that is in force in South Australia, allows for the creation of a legal entity able to buy and sell land and in general, enter into legally binding contracts. [24] Many clubs and societies begin life as an unincorporated body and seek to attain incorporated status to protect its members from legal liability and in many cases to seek government financial assistance only available to an incorporated body. Clubs and societies wishing to incorporate must meet the provisions of the relevant state act and lodge their constitution with the corresponding state government authority. [25]

Israel

In Israel, many non-profit organizations (NPOs) and non-governmental organizations (NGOs) are established as registered nonprofit associations (Hebrew amutah, plural amutot) (some are established as public benefit companies (Hebrew Chevrah LeTo’elet Hatzibur) not to be confused with public benefit corporations). Amutot are regulated by the Associations Law, 1980. An amutah is a body corporate, though not a company. The amutah is successor to the Ottoman Association which predated the State of Israel, and was established by the now-superseded 1909 Ottoman Law on Associations, based on the French law of 1901. An amutah must register with the Rasham Ha’amutot ('Registrar of Amutot'), under the purview of the Rashut Hata’agidim ('Corporations Authority') of the Ministry of Justice.

Civil law

Certain civil-law systems classify an association as a special form of contractual relationship.

Canada

Under the Quebec Civil Code an association is categorized as a type of statutory specific contract set forth in a constitution. An association can become incorporated with its own legal identity so that it may, e.g., open a bank account, enter into contracts (rent real estate, hire employees, take out an insurance policy), or sue or be sued.[ citation needed ]

France

In France, all voluntary associations are non-profit. They may count as unincorporated (association non-déclarée) or incorporated (association déclarée) and are created in terms of and governed by the Waldeck-Rousseau Act 1901. This is why association loi (de) 1901 is subjoined to their name, except in the Alsace-Moselle area, which is governed by local law in this regard (the area was German in 1901), and are therefore called association loi (de) 1908 .[ citation needed ]. If the association responding to defined criteria, like social or medical help, for example, they can be declared "public utility association" (association d'utilité publique) by French authorities. Associations created under the 1901 act have a significant amount of freedom in their internal operation, such as management or authorized members.

Germany

The German Civil Code sets out different rights and rules for an unincorporated association (nicht eingetragener Verein) with legal identity (Vereine, art. 21-79 BGB) versus an incorporated association ( Eingetragener Verein ) with full legal personality, which the law treats as partnerships (Gesellschaften, art. 705–740 BGB). Associations can be for-profit (wirtschaftlicher Verein), non-for-profit (Idealverein), or public (gemeinnütziger Verein).[ citation needed ]

Freedom of association

The freedom of association stands in the Universal Declaration of Human Rights: [26]

Article 20

(1) Everyone has the right to freedom of peaceful assembly and association.
(2) No one may be compelled to belong to an association.

Article 11 of the European Convention on Human Rights also protects the right to freedom of assembly and association.

Article 11 – Freedom of assembly and association

  1. Everyone has the right to freedom of peaceful assembly and to freedom of association with others, including the right to form and to join trade unions for the protection of his interests.
  2. No restrictions shall be placed on the exercise of these rights other than such as are prescribed by law and are necessary in a democratic society in the interests of national security or public safety, for the prevention of disorder or crime, for the protection of health or morals or for the protection of the rights and freedoms of others. This article shall not prevent the imposition of lawful restrictions on the exercise of these rights by members of the armed forces, of the police or of the administration of the State.

See also

Notes

  1. 1 2 Prins, Harald E. L.; Haviland, William A.; McBride, Bunny; Walrath, Dana (2010). Cultural Anthropology: The Human Challenge. Cengage Learning. ISBN   978-0-495-81082-7.
  2. "association". Dictionary.com Unabridged. Random House.
  3. Bradburn, Douglas (2009). The Citizenship Revolution: Politics and the Creation of the American Union, 1774–1804. University of Virginia Press. p. 217. ISBN   978-0-8139-3031-2.
  4. Robert, Henry M.; et al. (2011). Robert's Rules of Order Newly Revised (11th ed.). Philadelphia: Da Capo Press. p. 2. ISBN   978-0-306-82020-5.
  5. Politics on the Margins: The Athenian "Hetaireiai" in 415 BC. Historia: Zeitschrift für Alte Geschichte.
  6. Ascough, Richard S. "Greco-Roman Philosophic, Religious, and Voluntary Associations". In Community Formation in the Early Church and the Church Today. Edited by Richard N. Longenecker, 3–24. Peabody, MA: Hendrickson, 2002
  7. Kohn M. (2003). Merchant Associations in Pre-Industrial Europe. Ch. 16 in The Origins of Western Economic Success: Commerce, Finance, and Government in Preindustrial Europe Archived 2013-11-14 at archive.today .
  8. (1990). The role of institutions in the revival of trade: The law merchant, private judges, and the champagne fairs. The role of institutions in the revival of trade: The law merchant, private judges, and the champagne fairs. Economics & Politics.
  9. "The Rise and Fall of the Merchant Guilds: Re-thinking the Comparative Study of Commercial Institutions in Premodern Europe". Journal of Interdisciplinary History. Preprint Archived 2013-11-14 at the Wayback Machine .
  10. Review of Institutions and European Trade: Merchant Guilds, 1000–1800 published in Reviews in History.
  11. Starr M. (1919). A Worker Looks At History, Ch. 7: The Guilds. Plebs League. Google Books entry.
  12. History of London The Guilds and Livery Companies Archived 2013-05-29 at the Wayback Machine . History.co.uk.
  13. [1981] EWCA Civ 2, [1982] 1 WLR 522
  14. The definition was for tax purposes, but was expressed to be of general application.
  15. Xu, Y. & Ngai, N.P. (2011). "Moral Resources and Political Capital: Theorizing the Relationship Between Voluntary Service Organizations and the Development of Civil Society in China". Nonprofit and Voluntary Sector Quarterly. Sage. 40 (2): 247–269. doi:10.1177/0899764009340229. S2CID   154058761.
  16. In most common law legal systems, partnership is defined by statute as "the relationship which subsists between persons carrying on a business in common with a view of profit"
  17. Robert III, Henry M.; et al. (2011). Robert's Rules of Order Newly Revised In Brief (2nd ed.). Philadelphia: Da Capo Press. p. 85. ISBN   978-0-306-82019-9.
  18. Pettit, Philip (2009). Equity and the Law of Trusts. Oxford University Press. p.  62. ISBN   978-0-19956102-5.
  19. 1 2 Pettit, Philip (2009). Equity and the Law of Trusts. Oxford University Press. pp.  62–65. ISBN   978-0-19956102-5.
  20. Report on Unincorporated Associations (Report). Scottish Law Commission. November 2009. SCOT LAW COM No 217. Retrieved 1 February 2014. We are not aware of any material differences between the law of Scotland and the law of England and Wales regarding unincorporated associations.
  21. Sacred Companies: Organizational Aspects of Religion and Religious Aspects of Organizations, p108. Oxford University Press.
  22. "Nonprofit Organizations". Texas Secretary of State. Retrieved 29 December 2012.
  23. Richard A. Epstein (1992). "International News Service v. Associated Press: Custom and Law as Sources of Property Rights in News" (PDF). Virginia Law Review. 78: 85. doi:10.2307/1073304. JSTOR   1073304.
  24. "Associations Incorporation Act 1985". Government of South Australia, Attorney-General's Department. Retrieved 17 October 2012.
  25. "How to incorporate". The Government of South Australia, Consumer & Business Services. Archived from the original on 24 September 2012. Retrieved 17 October 2012.
  26. "The Universal Declaration of Human Rights". The United Nations. Retrieved September 8, 2012.

Related Research Articles

Corporation Separate legal entity that has been incorporated through a legislative or registration process

A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity and recognized as such in law for certain purposes. Early incorporated entities were established by charter. Most jurisdictions now allow the creation of new corporations through registration. Corporations come in many different types but are usually divided by the law of the jurisdiction where they are chartered based on two aspects: by whether they can issue stock, or by whether they are formed to make a profit. Depending on the number of owners, a corporation can be classified as aggregate or sole.

Business Organization undertaking commercial, industrial, or professional activity

Business is the activity of making one's living or making money by producing or buying and selling products. Simply put, it is "any activity or enterprise entered into for profit."

Corporate personhood is the legal notion that a corporation, separately from its associated human beings, has at least some of the legal rights and responsibilities enjoyed by natural persons. In most countries, corporations, as legal persons, have a right to enter into contracts with other parties and to sue or be sued in court in the same way as natural persons or unincorporated associations of persons.

Ownership is the state or fact of exclusive rights and control over property, which may be any asset, including an object, land or real estate, intellectual property, or until the nineteenth century, human beings. Ownership involves multiple rights, collectively referred to as title, which may be separated and held by different parties.

In law, a legal person is any person or 'thing' that can do the things a human person is usually able to do in law – such as enter into contracts, sue and be sued, own property, and so on. The reason for the term "legal person" is that some legal persons are not people: companies and corporations are "persons" legally speaking, but they are clearly not people in the ordinary sense.

Freedom of association encompasses both an individual's right to join or leave groups voluntarily, the right of the group to take collective action to pursue the interests of its members, and the right of an association to accept or decline membership based on certain criteria. It can be described as the right of a person coming together with other individuals to collectively express, promote, pursue and/or defend common interests. Freedom of association is both an individual right and a collective right, guaranteed by all modern and democratic legal systems, including the United States Bill of Rights, article 11 of the European Convention on Human Rights, the Canadian Charter of Rights and Freedoms, and international law, including articles 20 and 23 of the Universal Declaration of Human Rights and article 22 of International Covenant on Civil and Political Rights. The Declaration on Fundamental Principles and Rights at Work by the International Labour Organization also ensures these rights.

Partnership Arrangement in which parties agree to cooperate to advance their mutual interests

A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations. Organizations may partner to increase the likelihood of each achieving their mission and to amplify their reach. A partnership may result in issuing and holding equity or may be only governed by a contract.

Limited liability company US-specific form of a private limited company

A limited liability company (LLC) is the US-specific form of a private limited company. It is a business structure that can combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. An LLC is not a corporation under state law; it is a legal form of a company that provides limited liability to its owners in many jurisdictions. LLCs are well known for the flexibility that they provide to business owners; depending on the situation, an LLC may elect to use corporate tax rules instead of being treated as a partnership, and, under certain circumstances, LLCs may be organized as not-for-profit. In certain U.S. states, businesses that provide professional services requiring a state professional license, such as legal or medical services, may not be allowed to form an LLC but may be required to form a similar entity called a professional limited liability company (PLLC).

Joint-stock company Business entity which is owned by shareholders

A joint-stock company is a business entity in which shares of the company's stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their shares. Shareholders are able to transfer their shares to others without any effects to the continued existence of the company.

Corporate law Body of law that applies to the rights, relations, and conduct of persons, companies, organizations and businesses

Corporate law is the body of law governing the rights, relations, and conduct of persons, companies, organizations and businesses. The term refers to the legal practice of law relating to corporations, or to the theory of corporations. Corporate law often describes the law relating to matters which derive directly from the life-cycle of a corporation. It thus encompasses the formation, funding, governance, and death of a corporation.

Charitable organization Nonprofit organization with charitable purpose

A charitable organization or charity is an organization whose primary objectives are philanthropy and social well-being.

A Swiss association is a legal structure in Swiss law, defined in the civil code. It is similar to the Anglo-American voluntary association. Unlike in Germany, a Swiss association does not need to be registered in order to have a separate legal personality. It must be registered if it "conducts a commercial operation". An association can serve as a non-profit organization (NPO) or non-governmental organization (NGO) and this form is used by several Swiss sections of international NGOs such as Amnesty International, and the World Wildlife Fund, by business firms or by international organizations such as the Fédération Internationale de Football Association (FIFA). The form can also be used by political parties and alliances, such as trade unions.

Laws regulating nonprofit organizations, nonprofit corporations, non-governmental organizations, and voluntary associations vary in different jurisdictions.

Company Association or collection of individuals

A company, abbreviated as co., is a legal entity representing an association of people, whether natural, legal or a mixture of both, with a specific objective. Company members share a common purpose and unite to achieve specific, declared goals. Companies take various forms, such as:

In relation to juristic persons, the constitutional documents are the documents which define the existence of an entity and regulate the structure and control of that entity and its members. The precise form of the constitutional documents depends upon the type of entity, such as corporations or private associations.

An unincorporated entity has not been granted formal corporate status by incorporation. An unincorporated entity will generally be a separate entity for accounting purposes, but may or may not be a separate legal entity. For example, partnerships in England and Scotland are separate entities for accounting purposes, but while English partnerships are not separate legal entities, in Scotland they are separate legal persons.

South African company law

South African company law is that body of rules which regulates corporations formed under the Companies Act. A company is a business organisation which earns income by the production or sale of goods or services. This entry also covers rules by which partnerships and trusts are governed in South Africa, together with cooperatives and sole proprietorships.

Under English law, an unincorporated association is a group of people who come together

  1. for a common purpose
  2. intending to create a legally binding relationship between themselves.

Associations in English law are groups of people which are formed and act for a common purpose. In the United Kingdom, English and Scots law differ in the rules of contract and property, although a number of Acts of Parliament regarding associations are common to both jurisdictions. The five main types of association in English law are:

References