UCVO

Once a group of people have decided to join together to pursue objectives in which they have an interest they will rapidly be faced with having to decide what type of legal form/structure they wish to use for their particular organisation. Having made this decision, the group will still be faced with a series of practical questions irrespective of the form/structure they have chosen.

They will need to decide:
1. what the organisation has been created to achieve (i.e. what its purposes are)
2. who can become a member
3. who is to be responsible for managing and controlling the project
4. what the ‘managers’ and ‘controllers’ are authorised to do and how are they to be    appointed
5. whether the organisation can borrow money and give grants or loans to other projects
how members meet and take decisions.
A written agreement between the organisation and its members is frequently referred to as the organisation’s constitution. These types of practical questions which impact on how an organisation manages its internal relations and its dealings with the outside world are usually answered in the constitution.

The type of document adopted by an organisation will be influenced by a number of factors:

The chosen legal form will have a significant impact. If the organisation is an incorporated body such as a company limited by guarantee then it will be required to adopt a constitution which comprises two documents: the memorandum of association which regulates the company’s dealings with the outside world and the articles of association which regulate the company’s internal affairs.

A trust will be created by a trust deed. If the organisation wishes to obtain charitable status the whole structure of the constitution, particularly the purposes or objects, will be affected by the need to comply with the relevant legislation.

An unincorporated association may have a set of rules or simply rely upon a minute of the first meeting of its members.

Despite these external influences the actual form and content of the constitution is still largely within the control of the members of the organisation and it is for them to select the characteristics they want for their organisation and reflect these in the constitution. This means that it is still perfectly possible to have a unique character embodied in the constitution adopted by an organisation.

Whatever the chosen legal form/structure, a properly drafted constitution will need to address a number of basic issues. Thereafter, it is an issue for the members as to how complex they wish their constitution to be and there is considerable freedom for members in this task. Even where certain documents are prescribed, such as the memorandum and articles of association required for a limited company the actual content of these documents is largely determined at the discretion of the members.

The basic issues which are likely to be covered by a constitution are:

Purposes and Objects
The constitution should detail the main objects of the organisation. In simple terms this is a statement of why their organisation exists (e.g. to promote artistic endeavour, to relieve poverty, to promote youth education). The objects should be distinguished from powers.

Powers
These relate to the organisation’s internal administration - such as the ability to borrow money, employ staff and the like. These will also be stated in the constitution.

Membership
A constitution should clearly state who is eligible to become a member and any qualifications that may be required. Rights arising from membership should also be broached, as should how these may be varied or transferred and how membership may be brought to an end.

Structure of Board/Management Committee
This section covers a whole series of issues. Normally those involved in the management or control of the organisation will have been elected or nominated in which case procedures for such appointments should be included in the constitution. It may also be the case that reserved places are kept open for representative interests such as another named organisation or individual. Again these provisions will need to be included in the drafting. Detailed procedures for re-election and co-option of new officials may be considered desirable as will provisions detailing the actual powers and authority which the members have delegated to those in management or control.
 
Guide to Constitutions and Charitable Status  http://www.scvo.org.uk/scvo/Information/TertCategories.aspx?from=SS&al=t&SCatID=40&CatID=12&PageName=Guide%20to%20Constitutions%20and%20Charitable%20S
Drafting your constitution
http://www.scvo.org.uk/scvo/Information/ViewInformation.aspx?al=t&page=&all=False&from=SR&Info=469
Drafting Memorandun & Articles
http://www.scvo.org.uk/scvo/Information/ViewInformation.aspx?al=t&page=&all=False&from=SR&Info=476