What is an unincorporated Timeshare club?

Started by TimeshareTalk, November 22, 2019, 14:16:59

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This article focuses on what Timeshare clubs (unincorporated associations) are, how they are structured, governed and the issues to be considered when dealing with terminating membership within them.
What is an unincorporated Timeshare club?
An 'unincorporated Timeshare club' is an organisation set up through an agreement between a group of people who come together for a reason other than to make a profit.

You don't need to register a Timeshare Club, and it doesn't cost anything to set one up. Individual members are personally responsible for any debts and contractual obligations and equally individual members of committees can be held jointly and severally liable for contracts entered into on behalf of the association should the association permit them to.

If the association trades and makes a profit Corporation Tax is due in the same way as a limited company is.
The Timeshare Club is in a legal form commonly adopted by members of the and other not-for-profit organisations. Its lack of discrete legal identity is at the root of many of the problems which third parties encounter in dealing with such organisations. It is often the case that an organisation may start off as an unincorporated association because the structure is cheap to set up and can be run with relative informality, but as its membership grows and its dealings become more complex, the uncertainties surrounding the association's lack of separate legal identity drive members to adopt more certain or regulated form (such as the company limited by Guarantee). There is no statutory definition for a timeshare Club, but a number of definitions appear in case law. The most well-known definition comes from Lawton LJ in Conservative and Unionist Central Office v Burrell [1982] WLR 522, who defined the entity as: -
"two or more persons bound together for one or more common purposes, not being business purposes, by mutual undertakings each having mutual duties and obligations, in an organisation which has rules which identify in whom control of it and its funds rests and on what terms and which can be joined or left at will".
The same judge described the unincorporated association as a "creature of contract ", where the contract in question is made between the members of the association. The terms on which they contract with each other are the association's rules, and the consideration for entering into contractual relations is the member's pre membership payment and the maintenance obligations.

 A similar definition appears in Re Koeppler's Will Trust [1985] 3 WLR 765:  "an association of persons bound together by identifiable rules and having an identifiable membership".

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