[hackerspaces] Hackerspace law: unincorporated association

Russ Garrett russ at garrett.co.uk
Thu Aug 5 01:57:49 CEST 2010

On 4 August 2010 20:32, Christopher J. Pilkington <cjp at 0x1.net> wrote:
> Someone had mentioned that it might not be necessary for us to
> form a Corporation or LLC to get started; it might be possible
> to just form an unincorporated association.

Disclaimer: My advice is from a UK point of view and may not be
applicable in the US. I am not a lawyer, and this isn't legal advice.

Unincorporated associations (especially if they have a written
constitution) have a similar legal standing to corporations. You can
open a bank account in the association's name, and you can enter into
contracts under its name.

However, liability is unlimited. If you take out a lease as an
unincorporated association, then you as members of the association are
liable (to an unlimited amount) for any charges if the association
itself can't pay. Similarly, you have more liability if someone files
suit against you.

The first thing we did is incorporate as a company. The whole point in
incorporation is it gives legal protection for a risky endeavour
(generally in return for slightly more transparency). To me, this is a
no-brainer (although apparently running a corporation is a lot cheaper
in the UK than in the US).

Russ Garrett
russ at garrett.co.uk

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