Choosing a Legal Structure

Choosing a Legal Structure

The following guidance notes provide a useful starting point:

1. Setting up a Voluntary Group
   
   
2. Legal Structures
   

More on governing documents

Choosing a Legal Structure

When choosing a legal structure, specific advice should always be sought. However, the outlines below highlight some initial considerations.

Type of organisation: Association

Legal structure: Unincorporated

It is generally appropriate when one or more of the following apply:

• the organisation is relatively small in terms of assets;
• the organisation is to be a local branch of a national charity with a standard constitution;
• it has a membership;
• the Management Committee is elected or appointed for a fixed period, usually one year;
• the views of local residents, local councils, and other bodies, need to be represented through membership;
• the work of the organisation is to be primarily carried out through members or voluntary work.
• Management Committee members of an unincorporated association must be 18 years and over.

This simple structure is often chosen by: a small community association, a local branch, a small residents group, an issue based group, etc.

More on associations

Type of organisation: Company limited by guarantee

Legal structure: Incorporated

It is usually appropriate when some or all of the following apply:

• the organisation is quite large;
• it employs staff;
• it delivers charitable services under contractual agreements;
• it regularly enters into commercial contracts;
• it owns freehold or leasehold land or other property.

This structure is often chosen by: larger voluntary organisations, a community group that owns premises, an organisation employing staff.



More on company limited by guarantee

Where to get support

Choosing the right legal form for your organisation can be confusing, so for guidance on choosing your legal form, contact:

• NICVA Charity Advice Unit
  
• the Signposting Directory to identify other organisations that can provide support.