Choosing a Legal Structure

When setting up a group or organisation you need to make a decision on the type of organisation to set up and its correlating legal structure.

Your agreed set of rules for how the organisation will operate, your "governing document", will usually be drawn up during this stage of your development. 

The following article from NICVA provides a useful starting point:

  1. Legal structures for voluntary and community groups

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

This simple structure is often chosen by:

a small community association, a local branch, a small residents group, an issue based group, etc.

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; and
  • 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.

More on associations

Type of organisation: Company limited by guarantee

Legal structure: Incorporated

This structure is often chosen by:

larger voluntary organisations, a community group that owns premises, an organisation employing staff.

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; and
  • it owns freehold or leasehold land or other property.

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: