However, the time may come when you need a more formal structure for your community group, particularly if you wish to raise finance or funding or enter into a legal agreement.
The first stage in becoming a more formal organisation may be to adopt a constitution. A constitution is a simple set of rules which for you or your group to help make it clear to everyone involved what you intend to do and how you intend to operate. There are no legal rules about what your constitution should say, but there are good examples here and here.
If you are going to apply for grant funding, this document will show funders that you are well organised. The sorts of things you need to set out in your constitution include:
- The name and purpose of the group
- Who the members of the group are
- Who makes the decisions –the committee or board members
- How the committee will work with processes for decision making/resolving disputes
- Any designated roles such as Chair, Treasurer & Secretary
- Who has responsibility for Health & Safety
- How money is to be managed
- What powers the group has – for example: to raise funds, to give out grants, to manage buildings, to employ staff and so on.
As a constituted group – sometimes called an association – you are now able to apply for funding, set up a bank account, buy insurance, rent property, own equipment and even employ staff. You can also apply for charitable status.
However, it is very important to be aware that a constituted group is not an incorporated organisation and is not a legal body in its own right. It has no separate legal identity. That means that individual members who enter into obligations, such as contracts, on behalf of the group are responsible as individuals for its debts and other liabilities. The central feature of unincorporated businesses or organisations is personal liability for the owner, partner or member of the management committee.
If you are on the management committee of an unincorporated association your personal assets are at risk if the assets of the organisation are not sufficient to cover all the debts and liabilities.
An unincorporated group or association is perfectly appropriate if you want to run informal or small-scale community events or activities, such as:
- Befriending activities
- Coffee mornings
- Lunch clubs
- Music events
- Five-a-side competitions
- Parent and toddler sessions.
A Neighbourhood Forum set up for the purpose of producing a Neighbourhood Plan can also be an unincorporated, constituted group.
Once you have written you and agreed your constitution, it becomes the ‘governing document’ of your group. A good constitution sets out how your group is run, and can help to resolve disputes and enable new members to fully participate in group activities.