Dealing with unincorporated associations in a finance transaction—investigating capacity and authority
Dealing with unincorporated associations in a finance transaction—investigating capacity and authority

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • Dealing with unincorporated associations in a finance transaction—investigating capacity and authority
  • What is an unincorporated association?
  • Why it is important to understand the acts an unincorporated association will perform in a finance transaction?
  • Acts of an unincorporated association in a finance transaction
  • What is meant by 'capacity and authority'?
  • Investigating the capacity of an unincorporated association
  • Investigating the authority of an unincorporated association
  • Committee of members
  • Approval of all the members

This Practice Note which provides information on the type of acts an unincorporated association, its members or officers may perform in a finance transaction. Any reference in this Practice Note to an association is a reference to an unincorporated association. It also covers the steps which can be taken to investigate capacity and authority under English law.

What is an unincorporated association?

In Koeppler, an unincorporated association was described as ‘an association of persons bound together by identifiable rules and having an identifiable membership’. This is a distillation of the lengthier definition found in Burrell.

An unincorporated association:

  1. is a body, such as a members' club, society or trade union, which has not been incorporated as a company

  2. is an organisation formed when two or more persons (members) carry on activities together for a common purpose

  3. does not operate for the purpose of generating profit (where two or more persons carry on business for the purpose of making a profit, a partnership will be established and partnership law will apply)

  4. is not a separate legal entity from its members and officers, so the officers and members are personally liable for the debts and obligations of the association, and

  5. may not enter into contracts, own assets, sue or be sued in its own name

An unincorporated association has no separate legal personality. This