Duhaime's Law Dictionary


Association Definition:

A form of organizational structure for a defined group of individuals, for a religious, scientific, social, literary, educational, recreational or benevolent or commercial purpose.

Related Terms: Society, Partnership, Syndicate

A form of organizational structure which is institutionally operated on a cost recovery basis, for which incorporation is extended by the government or, in some jurisdictions, as an unincorporated association of individuals, for a set of purposes set out in statute such as religious, scientific, social, literary, educational, recreational or benevolent purposes, and generally operated as nearly as possible at cost.

In a passing-off case which considered  the terms society and association, British Diabetic Association v Diabetic Society Ltd., [1995] 4 All ER 812, the Court wrote:

"The crucial issue is whether the single word society is sufficiently differentiated from "\association....  (T)he two ...words ... are very similar in derivation and meaning, and not wholly dissimilar in form.  There may be background circumstances in which the small difference between the two words might be sufficient - it is, as the authorities emphasize, a question of fact to be decided in all the circumstances of the particular case - but in the end I have reached the clear conclusion that it is not a sufficient differentiation in this case."

In Pro-Campo Ltd. V Commissioner of Land Tax (NSW), [1981] 12 ATR 26, the Australian Court stated, in part adopting words from a previous NSW case:

"The three words, society, club or association, are words in frequent use in our community and societies, clubs and associations are well-known entities. One knows that many organisations which give themselves the title society or association or club are as often incorporated as they are unincorporated.

"Small bodies having few members tend perhaps to remain unincorporated whilst the larger groups tend to become incorporated....

"A society ... is a number of persons associated together by some common interest or purpose, united by a common vow, holding the same belief or opinion, following the same trade or profession. etc: an association.

"A society as thus described, in which the common element pertains to areas concerned with religion, may aptly be described as a religious society....

"I do not think that any relevant distinction in nature exists between the two. It merely seems to have happened that some organisations are called "associations", others are called "societies" but no meaningful difference can be detected between the two."

In the development of common law related to independent legal person, corporations which are not profit-seeking, nomenclature throughout common law jurisdictions has not been consistent. For what at the core represents a non-profit corporation, the terms used by jurisdictions include society, not-for-profit, non-profit, association and co-operative.

California's Corporations Code defines an association as including:

"... any lodge, order, beneficial association, fraternal or beneficial society or association, historical, military, or veterans organization, labor union, foundation, or federation, or any other society, organization, or association, or degree, branch, subordinate lodge, or auxiliary thereof."

Unincorporated associations deprive their members of the limited liability that incorporation usually provides. But the unincorporated format, where available, involves far less legal paperwork and is in great use for such things as volunteer groups, sports clubs and book review clubs.

Typically, an association would differ from a for-profit corporation and that rather than sell shares, it would sell memberships and rather than extend voting rights to shareholders, voting rights would be given to those who have bought memberships.

The legal history of societies, non-profits and such similar associations was set out by the British Friendly Societies Commission in a 1999 paper entitled Fact Sheet and as follows:

"The origins of friendly societies can be traced back to the time of the Roman Empire when associations known as collegia were formed for a variety of mutual purposes including the payment of burial expenses of members. These collegia evolved over the centuries into the craft guilds of the Middle Ages. Members of these guilds usually lived in the same community or engaged in the same occupation. Grants were available to members for relief during periods of financial hardship or sickness and to cover the cost of a decent burial. The guilds eventually disappeared and were replaced by sickness or burial clubs. It was out of recognition of the need to regulate and to legitimise these clubs, or "friendly societies", as they became known during the 18th century that the Friendly Societies Act 1793 was born.

"During the 19th century societies grew rapidly as they were effectively the only means by which the working population was able to protect itself against loss of income through sickness or to make provision for retirement."

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