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Dissolution of the association The various legal forms suggest that an association can be dissolved at a general meeting if the quorum has been reached and a majority of the members vote for the dissolution of the association. The property of the association is distributed to persons or organizations in accordance with the statutes. In general, despite their different legal structures, all associations have a general assembly open to all members and a board of directors that directs the association on behalf of the members. Additional committees can then be formed in the statutes. Learn more about board elections in associations! Although non-legally competent associations do not technically exist as a legal entity outside of their members, many state legislators have recognized the separate existence of an association by law. Therefore, in some jurisdictions, unregistered associations are granted the status of legal entities under the law and are allowed to acquire, hold and transfer property or to sue and be sued as a company. According to the general understanding, a club is simply an organization or association of people who meet for social purposes or for another common purpose. Typical examples of such associations are the American Trial Lawyers Association; the National Association of College and University Lawyers; American Civil Liberties Union; golf clubs; Yacht clubs, yoga clubs, running clubs, bridge clubs, etc. An association is simply a collection of people who have come together for a particular object or purpose.

The same persons could obtain limited liability protection by setting up a company, a limited liability company or a limited partnership. Instead, people simply choose to form an association, usually informally. These non-legal associations are usually formed by the action of a number of people who unite under a common name to achieve a goal (which must be legal). According to customary law, an association without legal capacity is not a company and has no status different from that of the persons who compose it. It is a set of people acting together to carry out a joint venture without forming a company. As with a general partnership, the liability of each member may be imposed for the actions of the others. Despite the informal absence of a separate entity, associations typically behave internally like a company with senior management, articles of association, and other rules of action. By far the most common participation in associations by the average person is membership in a golf club, tennis club, nautical club, bowling league, etc. It is important to distinguish between institutions that call themselves clubs, but are in fact also for-profit or non-profit businesses (such as health clubs and yoga studios, etc.), and associations that are more informal organizations that exist for mutual benefit and are not “owned” by third parties who make a profit or have control. Alternatively, associations can be formed as charities, cooperatives, mutual societies or corporations, with different laws applying to each form.

There is no general legal structure for associations, as they can be established in different types of legal forms. The reason why our office generally recommends the creation of limited liability companies for most of the associations considered is to avoid the danger that members face when they are reunited as parties individually when a legal dispute arises. This would not normally be the case when a formal entity is created. Such a risk of personal liability may not be a critical issue for many associations involved in limited activities, and insurance can often be taken out to cover associations that would bear the brunt of the costs of defending disputes. Nevertheless, there is no doubt that the extra effort and cost of setting up a limited liability company can certainly create greater security for members` individual assets. As one customer put it, it`s “cheap security.” In some states, including California, laws and jurisprudence have been passed that set requirements for the form and manner of enforcement of the by-laws and regulations of an association or club. The provisions of the statutes of an association or association are valid and binding on members as long as they do not violate the immoral, illegal or public order.