An unincorporated association is a group of persons forming an organization for a common purpose other than making a profit. Most states will grant tax-exempt status to such organizations but each state has its own process and requirements for obtaining such status. The main difference between an unincorporated association and a nonprofit corporation is legal liability. The members of the unincorporated association can be held directly liable for the actions of the association. The bylaws of the organization govern the day-to-day operations. They should include articles that cover at least the following areas; Organization; Purpose; Membership; and Officers.
Article I: Organization
This article should state the name of the association and how it is organized, i.e., as an unincorporated association under the laws of the state of ….
Article II: Purpose
This article should state the purpose of the association (a mission statement) and list the main activities of the association. For example, the purpose of this organization is to organize sports activities for underprivileged children in the community. The main activities are the organization of various sport teams and leagues and the conduct of fund-raising activities to raise funds for the various teams and leagues.
Article III: Membership
This article should provide the requirements or criteria to be a member and resignation or expulsion procedures. It should also state the dues or how the dues will be determined and when they are required to be paid.
Article IV: Officers
This article should list the offices to be filled and the duties of the various offices. For example, there may be a president, vice president, treasurer and a secretary. The duties might include the president presiding over meetings, the vice president assisting the president, the treasurer managing funds, and the secretary recoding minutes of the meetings. The article should state when and how elections will be held, terms of office, eligibility for office, how the nominating committee will be selected and function, voting guidelines, installation of officers and guidelines for annual meetings.
Article V: Administrative requirements and policies
This article should provide the fiscal year, audit and financial report requirements, uses of funds, amendment procedures and dissolution procedures and any other administrative requirements.
Drew Nelson is a Certified Public Accountant with over 20 years experience. As a professional he has written dozens of reports, presentations and manuals. His articles appear on various websites, covering finance, economics, politics and health topics.