An unincorporated organisation is an organisation made up of 3 or more individuals for a particular purpose.

This type of organisation has no distinct legal personality  which basically means that it cannot enter into legal agreements or take legal action in the name of the organisation. The responsibility rests with the individual trustees / management committee.

Which organisations use this type of structure?

For many small to medium sized organisations this structure is suitable relying as it does on the good governance of its trustees, jointly & sevesley (as individuals).

It may be appropriate to establish an unincorporated organisation where any one or more of the following applies:

• the organisation is to be relatively small in terms of assets;
• the organisation is to be a local branch of a national charity, and a standard constitution exists for branches;
• it has a membership;
• the charity trustees are elected or appointed to hold office for a fixed period of time - usually one year;
• the charity trustees are to be elected by members;
• the views of local residents, local councils and other bodies need to be represented through membership or as users of the facilities; and
• the objects of the organisation are to be carried out wholly or partly by, or through, the members, (i.e. where the members undertake office or voluntary work on behalf of the organisation).

Advantages:

• quick to set-up
• uncomplicated and flexible structure
• allows for a simple governing document which the members can, if they want, draw up themselves without involving lawyers or other advisors
• no fees unless legal or other professional advice is sought
• independent
• has democratic structures
• the procedures for winding up are relatively easy.
• easy accounting format, dependant on the level of income & expenditure
• with the appropriate clause trustees can be protected by limited liability insurance

Disadvantages:

• cannot enter into legal agreements or take legal action in its own right
• remains, for most purposes, as a collection of individuals, and therefore cannot acquire property in its own name
• legal proceedings cannot be taken by the group. Individual members of the management committee / trustees can be held personally liable and responsible for the organisation's obligations and debts.

The Governing Document:

There is a model constitution provided by the Charity Commission, model forms (GD3), which can be adopted by local groups. A model constitution can be adapted or drawn up from scratch to suit the needs of a group (see governing  documents).

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Model Governing Document

How is a constitution put into operation?

In practice, it is normally put into operation by being adopted, (accepted for use), at a formal meeting of those people who are, or will be, the charity trustees and the general membership. This means that you will require a final typed version of the constitution which should be:

• signed by all the charity trustees, e.g. the committee members;
• dated the day of the meeting at which it was agreed.

It will also be necessary for the minutes of that meeting to formally record that the constitution was adopted.

Charity Law

An unincorporated organisation is legally required to register with the Charity Commission if it's aims are charitable & has an annual income of over  a £5,000.

Charity Commission Requirements

 Small charity income & expenditure up  £5,000

• A small charity, which is voluntarily registered with the Commission, will follow the requirements for light touch regulation,
• Submit annual simplified  accounts on a receipts & payments, or accruals basis 
• Submit a Annual Report
• Ask permission or notify them of any changes to the governing document

Charity  with income / expenditure between £10,000 - £100,000 will also have to:

• Have their accounts externally scrutinised (independent examinar).
• Complete an Annual Return for the Commission

What documents are needed for registration?

In addition to the application form (APP 1) and the declaration form (DEC 1), both of which are included in the Application to Register a Charity pack from the Charity Commission, the following must be provided:

• two certified copies of the constitution;
• a certified copy of the minutes of the general meeting at which it was adopted; and
• a certified copy of the minutes of the general or special meetings at which any subsequent amendments were approved by the general membership.

To certify a document, a person authorised by the trustees should write on the copy: "I certify this to be a true copy of the original" and then sign and date it. The minimum requirements for registration  is an annual income of £1,000 or more.

Once unincorporated organisations are registered with the Charity Commission they are classed as a registered charities.