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:
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:
- NICVA's Governance and Charity Advice Service
- local organisations listed in the Training and Support section.
