Uniform Unincorporated Nonprofit Association Act

This article is provided for your information as a summary of the UNIFORM UNINCORPORATED NONPROFIT ASSOCIATION ACT (UUNAA) Which is mentioned in TYPES OF NONPROFITS. 

To read about this act in its entirety please visit it’s source at http://www.nccusl.org/

There are thousands of associations of people in the United States that fall into the category of unincorporated nonprofit associations. They range from local neighborhood associations to national associations with large membership. They are all associations that for one reason or another cannot or have not chosen to become not-for-profit corporations. The common law has been loath to give legal status to associations that do not incorporate. They are regarded as pure aggregations with no legal personality. They cannot own or hold real property. Such associations cannot sue or be sued as associations. Individual members may acquire liability simply because of membership in the association, no matter how casual. Acting as officers and directors may provide individuals with serious liability exposure. Finding insurance may be nearly impossible.These disabilities discourage voluntary participation in the activities of such associations. And yet such associations are essential to the well-being of every community, large or small, in the entire United States. There is at last a remedy that abolishes these unnecessary barriers to participation. As a foundation for community, there is no better solution than that proposed in the Uniform Unincorporated Nonprofit Association Act (UUNAA), promulgated by the Uniform Law Commissioners in 1992, with technical amendments made in 1996.

UUNAA defines unincorporated nonprofit associations broadly as unincorporated organizations “consisting of [two] or more members joined by mutual consent for a common, nonprofit purpose.” Members may be individuals, corporations, other associations, and governmental agencies. Having so defined these entities, the Act does five things for such associations and their members. First, it provides them with the legal capacity to receive, hold, and transfer personal and real property. Second, it provides limitations upon the liability of members and functionaries of these associations for tort and contract. Third, it provides them standing to sue and be sued as associations. Fourth, it provides a procedure for disposing of the property of an inactive association. Fifth, it permits designation of an agent for service of process. It does all of these things without requiring any association to conform to a registration statute, to pay fees to the state to qualify for the benefits of UUNAA, or to submit to any mandated form of organization and method of governance.

UUNAA permits a nonprofit association to acquire, hold, encumber, or transfer interests in real or personal property in its own name. An association can receive property from an estate. To facilitate holding and transferring real property, an association may, but is not required, to file a statement of authority in the real property records. Any person dealing with the individual named in the statement of authority and who gives value without notice that conferred authority is invalid, may regard the authority conferred as conclusive.  

UUNAA provides that any association subject to it is a separate legal entity, separate from its members. A person is not vicariously liable for the association’s torts or contracts merely by virtue of being a member, being considered a member, or participating in any way in the management of the association. Members may sue a nonprofit association and may be sued by it, as well.Concomitantly, the association has standing to institute, defend, intervene, or participate in any proceeding, judicial or otherwise, that involves it. It may assert a claim on behalf of members, if one or more members have standing to assert the claim in their own rights. A judgment against an association is not by itself a judgment against any member.

UUNAA provides for disposal of the personal property of an inactive association, first, to anyone entitled to that property in documents of the association. If there is no such document, then a cypres rule applies. The property must be transferred to another association pursuing broadly similar purposes. These transfers apply to associations that have been defunct for at least three years.

Lastly, UUNAA permits, but does not require, a nonprofit association to appoint an agent for service of process. This facilitates the legal rights of the association accorded it in other sections of UUNAA. These are the principal benefits of UUNAA to the many millions of people who aggregate into associations for everything from sport to neighborhood improvement. This Act will make voluntary action by citizens in their communities more secure and happier. It is exactly what is needed for communities, large and small, in the entire United States.

© 2001 National Conference of Commissioners on Uniform State Laws 211 E. Ontario Street, Suite 1300 Chicago, Illinois 60611 (312) 915-0195 ~ fax (312)915-0187