FAQs unincorporated associations

It's flexible and simple. Staying unincorporated is an ideal way for a small group of volunteers to raise money, says Ian McLintock

If you're a new PTA or a small group that doesn't expect to raise more than £5,000 a year, there's no obligation to register with the Charity Commission. Remaining unincorporated will keep admin to a minimum, leaving you more time to plan events and raise funds. You can even open a bank account and claim Gift Aid.

How can I set up an unincorporated association?

It's quick and straightforward. All you need is a written constitution and three people willing to be trustees. Unlike a registered charity, an unincorporated association doesn’t have limited liability, so trustees may be personally liable if anything goes wrong. Good insurance is therefore a must, and unincorporated associations should avoid entering into major contracts, such as taking on leases or employing staff. They should also be careful when planning potentially risky activities.

Is there a difference in law between charities registered with the Charity Commission and unincorporated associations?

No, in law a charity is an organisation which has charitable purposes and is exclusively for the public benefit. Trustees must act in the charity's best interest at all times and ensure that no individual derives personal gain from its work.

Can an unincorporated association open a bank account?

Yes, you can open a bank account in the name of your charity. The bank will probably want to see your constitution first. Having a bank account will reassure people who interact with you, and you'll need it if you start applying for grants.

Does an unincorporated association need to file any documents?

No, but it's good practice to make everything publicly available. Add your constitution to your Facebook page, send it as a PDF if anyone enquires and make it available on your school website or noticeboard. Be fair and transparent at all times.

Does an unincorporated association need to file accounts?

No, but you should still keep proper records of your income and expenditure. Something simple, such as a cash book, would be sufficient.

Should an unincorporated association hold an AGM?

Yes, you must hold an AGM at which the accounts and annual report should be presented, and trustees elected.

Does an unincorporated association need insurance?

If you're running events, you’ll still need public liability insurance. You might also consider adding any officers and directors to indemnify those individuals. Events and activities should be fun, but you are responsible for running them properly and safely. For example, if you've hired a local hall, you'll need to be familiar with the fire safety procedures and exits. Make sure risk assessments are completed and circulated ahead of time.

Can an unincorporated association claim Gift Aid?

An unincorporated association can still register with HMRC and claim Gift Aid. HMRC won't register you if you raise more than £5,000 and aren’t registered with the Charity Commission.

Can an unincorporated association still apply for grants?

It's commonly understood that only registered charities can apply for grants. But grant givers can fund anyone they choose to. Many organisations, including big funders such as the National Lottery Awards for All, will accept applications from unincorporated associations. You'll need to have a constitution and a bank account. There are 10,000 fund makers in the UK, and often less competition for the smaller, local grants that will be perfect for your PTA.

If the grant you're interested in states that only registered charities can apply, you won't be eligible. But phrases such as 'constituted' or 'local community groups' usually mean you can go ahead. Contact the funder before you start if you’re not sure.

Does incorporation affect licensing?

Your association can apply for any licences it requires to legally hold events and fundraisers. But remember that the trustees need to apply on their own behalf, so make sure everyone acts responsibly.

Are people less likely to donate and give raffle prizes to an unincorporated association?

Inside your school community, everyone knows who you are and the good work you do, so it's unlikely to make much difference. Once you start to look outside the school gates, people are more likely to donate to a registered charity. If you're going after additional funds, you'll soon reach a point where you need to register anyway.

At what point must we register with the Charity Commission?

All charities with an annual income above £5,000 must register with the Charity Commission. You are allowed to register if your income is lower and you wish to do so.

  • Ian McLintock is the founder of the Charity Excellence Framework, a free online toolkit that connects charities to resources and people who can help. charityexcellence.co.uk