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Private Members’ Association

A Private Members' Association — a PMA — is a specific form of unincorporated association, distinguished not by a different legal structure but by its deliberately private character. Where an unincorporated association can be open to anyone, a PMA is constituted to operate exclusively within the private domain — membership is by invitation or acceptance only, its affairs are its own, and it operates for the benefit of its members rather than the public at large. This distinction — between public and private — is what gives a PMA its particular character and its particular freedom.

What a PMA is

A Private Members' Association is an unincorporated association whose constitution specifically defines its private nature. It has no separate legal personality — like any unincorporated association, it exists through its members rather than alongside them. It is not registered at Companies House. It is not regulated by the Charity Commission. It does not require government approval to exist or to operate. It comes into being through agreement between its members, governed by its own rules, for its own purposes.

What makes a PMA distinct from a general unincorporated association is its explicit operation within the private domain. A PMA does not hold itself out to the public. It does not offer its services, its membership, or its activities to the world at large. It operates between its members — in a space that is private, consensual, and self-governing. The rules that govern it are the rules its members have agreed to. The standards it holds itself to are its own standards. It is accountable to its members, not to the public.

How it is created

A PMA is created by its founding members adopting a constitution — sometimes called a membership agreement or a founding charter — that sets out the association's purpose, its membership criteria, its governance structure, and the terms on which members join and participate. No external approval is required. No registration is necessary. The constitution is the founding document and the governing document — it is what the association is, in written form.

The constitution of a PMA should be carefully drafted. It should be explicit about the private nature of the association — that membership is by invitation or acceptance only, that the association operates in the private domain, and that its affairs are governed by its own rules rather than by public law. It should set out clearly how members join, what they agree to by joining, and on what terms membership can be ended. It should address what happens if a member dies or loses capacity, how officers are appointed and replaced, and how the association itself can be dissolved.

The quality of the constitution is the quality of the association. A poorly drafted constitution creates ambiguity, disputes, and vulnerability. A carefully drafted one provides clarity, protection, and a framework that the association can operate within with confidence.

The private domain — why it matters

The distinction between the public and private domains is not merely theoretical — it has real practical significance. Public law — statute, regulation, the framework of the state — applies to persons operating in the public domain. The private domain — the space of private agreement, private association, private arrangement between consenting individuals — operates differently. It is governed more by the principles of contract and private agreement than by the regulatory frameworks that govern public-facing activity.

A PMA that is genuinely private — whose membership is genuinely by acceptance only, whose activities are genuinely conducted between members rather than offered to the public — occupies a different position from a business or a publicly available service. It is not immune from all law — natural law and the principles of equity apply to everyone, in every domain. But it is not subject to the same regulatory apparatus as a public-facing entity, and the relationship between the association and its members is governed primarily by the constitution and the agreement between them.

This is why the private nature of a PMA must be genuine — not constructed. A PMA that holds itself out publicly, that offers its services to anyone who asks, or that operates in the public domain while claiming the protections of the private, is not a genuine PMA. The private character must be real and consistently maintained.

Membership

Membership of a PMA is by acceptance — the member applies or is invited, and the association accepts or declines. This is not a passive or automatic process. The association has the right to decline membership, to set conditions for joining, and to end membership if the conditions are no longer met or if a member acts contrary to the association's rules. The member, in joining, agrees to the constitution and accepts the terms on which membership is offered.

This consensual, bilateral nature of membership is fundamental to the PMA's character. Every member has agreed to participate. Every member has accepted the association's rules. The relationship is one of mutual agreement — and the obligations it creates flow from that agreement rather than from any external imposition. A member who joins a PMA is not subject to its rules because the state says so. They are subject to them because they agreed to be.

Membership is personal and non-transferable. It cannot be passed on through a Will, cannot be inherited, and does not form part of a member's estate. When a member dies, their membership ceases. The benefits of membership — the resources, the services, the relationships — were personal to them and do not pass to their estate or their beneficiaries.

Governance

A PMA is governed by its constitution and by the officers appointed in accordance with it. There is no external regulatory body overseeing its governance — no Companies House, no Charity Commission, no Privy Council. The association is accountable to its members, and its governance is as good as its constitution and its officers make it.

Officers of a PMA hold their positions in accordance with the constitution — appointed, elected, or designated as the constitution provides. They act on behalf of the association and on behalf of the membership. Because the association has no separate legal personality, officers who act on its behalf do so personally — with the same personal liability implications as any officer of an unincorporated association. The constitution should make clear how officers are appointed, what authority they hold, and what happens when an officer dies, loses capacity, or leaves the association.

Liability

A PMA, as an unincorporated association, has no separate legal personality — and the liability implications are the same as for any unincorporated association. Officers who enter into contracts, take on financial obligations, or hold assets on behalf of the association do so personally. Where the association cannot meet its obligations, the personal assets of the officers who acted on its behalf may be at risk. This is the most significant practical limitation of the PMA structure — and one that the constitution should address by setting clear limits on what officers can and cannot do without member approval.

Tax

The tax position of a PMA is not straightforward — and anyone operating one with significant financial activity should take professional advice. The general position is as follows.

A PMA, as an unincorporated association, is not a separate taxable entity in the way a company is. But it is not outside the tax system. HMRC applies the general rules for unincorporated associations, modified where the mutual trading principle applies.

The mutual trading principle is the most significant tax concept for a PMA. Where a PMA trades exclusively with its own members — income comes from members, benefits flow to members, and any surplus is returned to members rather than retained as profit — HMRC may treat that activity as mutual trading, which is not subject to income tax or corporation tax. The rationale is that you cannot make a taxable profit from yourself. A member paying into a mutual arrangement and receiving benefits from it is not engaged in a commercial transaction in the taxable sense.

The mutual trading exemption is not automatic. It requires the conditions to be genuinely met — genuine mutuality, genuine membership, genuine return of surplus. HMRC has challenged arrangements that claim mutual trading status without meeting those conditions in substance.

Where a PMA generates investment income — interest, dividends, rental income — corporation tax may apply to that income even where the mutual trading exemption covers the core activities. VAT registration may be required where the value of services provided to members exceeds the registration threshold, currently £90,000 per year.

The tax position depends on the specific activities of the association, how income is generated, and how it flows. A PMA that operates simply — subscriptions in, services to members out, surplus returned — is in a different position from one with significant investment income or commercial activity alongside its member services. Professional advice is worth taking before the association generates significant income, not after.

What a PMA is not

A Private Members' Association is not a mechanism for avoiding legal obligations that genuinely apply. It is not a shield against tax, against debt, against the consequences of harm caused to others. Natural law applies in the private domain as much as in the public — the obligation not to harm, not to deceive, not to take what belongs to another, exists regardless of what domain a man or woman is operating in.

A PMA that is used to avoid genuine obligations — to evade tax, to escape contractual liability, to harm others — is not exercising the legitimate freedom of the private domain. It is abusing it. And that abuse does not attract the protections that a genuine private association would. The private character of a PMA is a freedom that comes with responsibility — the responsibility to operate honestly, in accordance with the association's own rules, and without harm to others.

"The freedom of the private domain is real. It is the freedom of men and women to associate, to agree, to govern themselves according to their own rules, and to operate without the apparatus of public regulation intervening in every aspect of what they do. That freedom is worth protecting — by using it well, by operating genuinely within it, and by never mistaking it for a licence to harm or deceive."

On death — what happens to the association

A PMA does not automatically cease to exist on the death of a member or officer — but as with any unincorporated association, the death of a key officer can have significant practical consequences. The constitution should address what happens — how the vacancy is filled, who has authority to act in the interim, and how assets held in the officer's name are dealt with.

The death of a founding member or principal officer may have a deeper impact on a PMA than on a larger, more established organisation. Where the association's identity, its relationships, and its purpose are closely connected to a particular individual, their death raises questions that go beyond the administrative — questions about the association's future direction, its continued purpose, and whether it should continue at all. The constitution should address these questions in advance rather than leaving them to be resolved at a moment of loss.

Where an officer holds assets personally on behalf of the association — funds, property, intellectual property — those assets form part of their estate on death and must be dealt with by the executor. The executor has no automatic obligation to transfer those assets to the association's new officers. A constitution that addresses how assets are held — and provides a mechanism for their transfer on a change of officer — avoids this difficulty.

On incapacity — what happens to the association

A PMA does not cease to exist if an officer loses capacity — but the officer's ability to fulfil their role ends immediately. Without a Property & Financial Affairs LPA, no one has automatic authority to deal with assets held in the officer's name on behalf of the association. The constitution should address incapacity explicitly — whether the officer's position terminates, how a replacement is appointed, and what authority the remaining officers have in the interim.

A Property & Financial Affairs LPA is important for any officer of a PMA who holds assets or obligations personally on the association's behalf. It gives a trusted attorney the authority to manage those personal affairs — including dealings with the association's assets — if capacity is lost. Without one, the association may find itself unable to access its own resources until a Court of Protection Deputyship is obtained.

Key planning points for PMA members and officers

A carefully drafted constitution — explicit about the association's private nature, its membership terms, its governance, and what happens on the death or incapacity of a member or officer. Reviewed regularly as the association grows and circumstances change.

A Property & Financial Affairs LPA for each officer who holds assets or obligations personally on the association's behalf — so that a trusted attorney can act if capacity is lost.

Clear arrangements for how assets are held — ideally through a designated officer role rather than a named individual, with provisions in the constitution for how those assets transfer when the officer changes.

A Will that addresses any personal assets connected to the association's operations — making clear whether the intention is for those assets to remain available to the association after the member's death, and giving the executor the information and authority needed to deal with them appropriately.

An honest assessment of whether the unincorporated structure remains appropriate as the association grows — and whether incorporation might offer better protection for the association and its officers at some point in the future.