Created: July 23, 2013 at 3:02 PM | Updated: August 8, 2020 | By Community Resource Kit
An unincorporated group can be any group of people that gets together for some purpose, whether it is to change something in the community, provide some service, work on a project or simply to socialise.
Nearly all groups start off informally, without a highly organised structure or any legal standing, and small groups may decide they don't need to formalise these things. In New Zealand, the largest proportion of not-for-profit institutions (61 per cent) are unincorporated societies.
Typically, an unincorporated group will have some key features:
As a matter of good practice, an unincorporated group should record its rules and processes for managing the group's affairs and making decisions. These rules could be based on the group's past practice and should be agreed upon by all your members. Although there is no legal requirement for writing down your rules, it will help your group operate smoothly and will also be useful if any disputes arise, especially if there are assets or money involved.
There are some advantages of a group being unincorporated, including:
Some limitations of unincorporated status include:
Tip: Unincorporated status tends to suit groups that are social in nature, or groups that have formed to address an urgent, short-term issue. It may be easier and cheaper to remain unincorporated, however, members should be aware that everyone in the group could be personally liable for any potential debts.