Current Uniform Acts

Unincorporated Non-profit Associations Act 2008

LEGAL STATUS, CAPACITY AND POWERS

Separate legal entity

7 A nonprofit association is a legal entity separate and apart from its members and managers.

Comment: This section sets out a fundamental statement of principle for the Uniform Act. The separate legal status of a UNA is a concept that undergirds later provisions in the Uniform Act allowing a UNA to hold and dispose of property in its own name and to sue and be sued in its own name. It is also the key underpinning of the liability rules in the Uniform Act, which insulate the assets of members from claims against the UNA. This section reverses traditional common law principles that treat UNAs and other unincorporated bodies such as partnerships as aggregates of their members (or partners) and not as legal entities in their own right.

Derivation: Principle (7).

Continuing existence

8 A nonprofit association continues to exist, despite changes in its membership, until it is dissolved and wound up as provided for in sections 25 and 26.

Comment: This section contains an important corollary to the general principle set out in section 7. It declares that a UNA continues in existence until it is dissolved and wound up under the Uniform Act. This is one of the key aspects of legal entity status.

Derivation: Principle (8).

Legal capacity and powers

9 A nonprofit association has the legal capacity and powers of a natural person, including the capacity and power

(a) to acquire, hold, encumber or transfer property in its own name;

(b) to enter into contracts in its own name;

(c) to be a beneficiary; and

(d) to sue and be sued in its own name, and to commence, defend, or intervene or participate in, any judicial, administrative or other proceeding.

Comment: This section contains an orthodox statement of the capacity and powers of a UNA in language that is familiar from Canadian for-profit and nonprofit corporate statutes. The section is included in the Uniform Act as a corollary of the general principle set out in section 7. The list of specific powers set out in clauses (a) to (d) are included for further clarity.

Transitional — transferred property

10 An estate or interest in real or personal property that

(a) by terms of a transfer was purportedly transferred to a nonprofit association before this Act came into force; and

(b) under the laws of [enacting jurisdiction], did not vest in the association or in one or more persons on behalf of the association;

vests in the association on the day this Act comes into force, unless the parties have treated the transfer as ineffective.

Comment: The rule at common law is that a gift to a UNA is void. This conclusion follows from the UNA’s lack of legal entity status. This section is intended to give effect to a transfer of property that would have been frustrated by the common law rule. It is not a retroactive rule. It only applies to facts that are in existence when the Uniform Act comes into force.

Derivation: no specific principle.

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