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Kentucky’s New Unincorporated Nonprofit Associations Act
Updated May 26, 2015

On March 20th, 2015, Governor Beshear signed  House Bill 440 into law.  A key component of this bill creates Chapter 273A, The Unincorporated Non Profit Association Act, which allows unincorporated nonprofit associations to register for limited liability and provides default rules for governing, managing and controlling small nonprofit associations, such as Little League teams or other small community organizations.

 

With the new law, Kentucky joins 15 other states in providing a legal framework for small nonprofit associations that often do not wish to go to the trouble and expense of formally incorporating. The new statutes definitively state that an unincorporated nonprofit association is a legal entity distinct from its members and managers, which has the same powers as an individual to do what is needed to carry out its purposes,  including acquiring, holding, encumbering or transferring an interest in real property in its own name. 

 

Act Enables Unincorporated Nonprofit Associations to Register for Limited Liability

In addition, unincorporated nonprofit associations may register for limited liability by filing a Certificate of Association containing basic facts about the association, including the appointment of a registered agent for service of process and a statement of the association’s purpose. Filing the Certificate of Association obligates the association to file an annual report between January 1 and June 30th of each year. The advantage of filing the Certificate of Association is that liabilities of unincorporated nonprofit associations who have done so become solely the liabilities of the association and not a debt, obligation or liability of the members or managers, except in the case of negligence, wrongful acts or misconduct.

 

Default Governing Rules

The other advantage of the new statute is that it spells out default rules for governing an unincorporated nonprofit association that apply unless otherwise provided by the association’s governing principles. Default provisions require approval of the membership to admit or expel a member, select or dismiss a manager, make changes to the governing principles and to dispose of all or substantially all of the property of the association, among other things.  “The statute affords significant flexibility; to the extent a particular group has agreed to rules and procedures, especially its internal management, they will be respected.” [1]   

 

Many Small Nonprofit Associations to Benefit

According to the Uniform Law Commission’s article, Why States Should Adopt RUUNAA, there are currently “hundreds of thousands of unincorporated nonprofit associations in the United States [that] are subject to a hodgepodge of common law principles and statutes governing some of their legal aspects”.  These organizations, which organize and operate to benefit their communities, will definitely benefit from these rules that recognize them as associations separate from their individual members, allow them the protection of limited liability and provide guidance for their governance and operation.



[1] See Kentucky Business Entity Law blog posting of March 5, 2015.

 




Holiday Closings for June and July 2015
Updated May 18, 2015

To assist you in planning closing dates and avoiding unpleasant surprises, National Corporate Research (NCR) has compiled a list of U.S. state holiday closings for June and July. To download the list in PDF format, click here. secure

 

For clients who work on international transactions, we have also compiled a list of corporate registry holiday closures in select countries. To access our international list of holiday closings for June and July, click here secure.   

 

Please note that some jurisdictions declare holidays at the last minute. So if a particular filing date is important to you, contact your NCR service specialist and we will double check at that time to ensure the filing office will be open on the date you are interested in. Also note that as we become aware of any changes to the holiday closing lists, we will post updated versions of the lists to this page of our website.

 

If you have any questions, feel free to contact your NCR service specialist.

 

Subscribe to our updates to receive e-mail alerts of holiday closings every two months.

 




Delaware Rapid Arbitration Act Approved by Governor
Updated April 9, 2015

On April 2, 2015, Governor Jack Markell signed into law House Bill No. 49, as amended by House Amendment No.1. The legislation adds Chapter 58, the Delaware Rapid Arbitration Act, to Title 10 of the Delaware Code and takes effect 30 days after enactment.  

 

The Act is intended to provide an additional option by which sophisticated Delaware business entities may resolve their business disputes in a prompt, cost-effective and efficient manner through voluntary arbitration conducted by expert arbitrators and to ensure rapid resolution of those disputes. Nothing in the act is intended to impair the ability of entities to use other arbitral procedures of their own choosing.

                 

For more information, click here to view the full text of House Bill No. 49.