For years we have counseled groups of unincorporated individuals carrying on nonprofit activities to incorporate in order to obtain a level of protection from individual liability for the association’s obligations. The law was unclear in many states and individual members of unincorporated associations could often end up with personal liability for the obligations of the association as if it were a general partnership.
Those rules are slowly changing as more states adopt the Uniform Unincorporated Nonprofit Association Law, first promulgated by the National Conference of Commissioners on Uniform State Laws in 1996, and now the Revised Uniform Unincorporated Nonprofit Association Law issued in 2008. The Uniform Act was adopted in about eight states, and the Revised Act has now been adopted in five jurisdictions, including most recently in Pennsylvania (part of Act 67 of 2013). (The other jurisdictions adopting the Revised Act are Arkansas, Iowa, Nevada and the District of Columbia.) Under the Act, a member of an unincorporated association is not liable for such obligations solely by virtue of being a member.
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