What Is an Association? Complete Guide & Walkthrough
Close social relationships lead to the formation of associations to achieve specific goals or objectives. An association can be defined as a group of people who come together for a specific purpose or a limited number of purposes.
Associations are (NGO) Non-Governmental Organizations. Associationism, most shortly and succinctly, means “Serving the society without compensation.” Associations are official organizations since membership of the association is of an official nature.
What is Association?
Associations are groups of persons with legal personalities formed by constantly combining their knowledge and work to achieve a specific and common purpose other than sharing profits. An association is a group of people (called Members) who come together for a common purpose. Associations earn their tax-exempt status by meeting many of the needs of their members and the general public that the government would otherwise have to meet.
An association is an organization deliberately created for the collective pursuit of particular interest or a set of interests shared by its members. Before you establish an association, a group of people must first be registered as members. To show a harmonious and successful performance under the umbrella of the association, rules regarding the operation of the association must be determined, and the members must be organized in accordance with these rules and work in line with the objectives of the association.
Definition of Association
People voluntarily join associations because they want to work together on a common cause or interest. Most of the associations established today are the product of modern industrial society and the new political system. Membership in associations is optional, but the family and the state, both considered associations, are structures in which people unintentionally and unknowingly participate.
Associations are usually contrasted with involuntary groupings serving a greater variety of ends, such as kin groups, castes, social classes, and communities. However, associations are organizations with a high sense of belonging, in which members join at will and expectations. An association is a group or organization to which you may belong.
The existence of associations, non-governmental organizations, and non-profit organizations in society shows the power of communication, cooperation, cooperation, and solidarity in that society. Associations are made up of members who come together around their founding objectives, so the fact that associations are effective and numerous in the community shows the power of civil solidarity. Today, the importance of an organized society is increasing day by day. Many risk factors such as economic and political crises, disasters, refugee threats, epidemics affect organized societies less, or such societies recover faster.
The 3 Main Features of the Association is as below:
a) Members: An association can be formed with the cooperation and efforts of many people as members.
b) Common Purpose: All associations should have a specific common purpose.
c) Rules: Rules help in keeping discipline in the association.
Associations can be classified according to their types as follows:
a) Associations operating commercial enterprises-Associations not operating commercial enterprises
b) Ordinary associations-Associations for the benefit of the public
c) Associations established in Turkey-Foreign associations
Bodies and Members of the Association
Bodies of an association are the general assembly, the board of directors, and the supervisory board. The general assembly is the most authorized decision-making body of the association; consists of registered members of the association. The board of directors is the executive and representative body of the association. The duties of the board of directors and, therefore, the association are fulfilled according to the law and the statute of the association.
Every natural and legal person with the capacity to act can become a member of associations. However, associations may set some standards for membership. For example, for membership in a union, working in the occupational group and sector in which the union operates is a mandatory condition of membership. If the member changes job and starts working in a workplace outside the scope of the union, his membership in the union is terminated. In other words, if the criteria for membership in the union are lost, the membership automatically drops.
Incorporated vs. Unincorporated Associations
Associations may be incorporated or unincorporated. There is a very big distinction between each form. When people come together in the initial circumstances to form an association, the association will be unincorporated. It will remain so until the organization members complete the steps to become incorporated.
A professional association is an organization of people who work within the same field and collaborate to make advancements in their field. Most professional associations are non-profit organizations with a mission to create and maintain high standards for their industry.
How to Incorporate Your Association
When establishing an association, the most important issues to consider are how the management will be structured and how you want to create membership rules.
1) Choose an Association name: The association name should basically be a name that can be associated with the field and potential members of the association.
2) Appoint a Board of Directors: Some states require this period to be completed before the association is formed.
3) Decide on a legal structure: In this step, choose association.
4) File your incorporation paperwork:
- Your association’s name
- Name and address of the registering agent (the founder)
- Address of the association
- Names and addresses of the board members
- Statement of purpose to which your association will operate
5) Apply for non-profit federal and state tax exemptions: You are establishing an association, so you need to select the forms under the heading Other Non-profit or Tax-Exempt Organizations (501(a)).
6) Obtain necessary licenses and permits: During the establishment of the association, it may be required to obtain separate permits from the city and/or state administration of the association and from various organizations. Federal licenses and permits and State licenses and permits lists should be checked.
Examining the association’s application files and the permit process is quite long. While it is possible to form a company in a few days in some states, the establishment process of an association takes a minimum of 3 months. In some states, the process can take up to a year. Support can be obtained from consultant companies to ensure that the files prepared for the association’s establishment are complete and complete. Otherwise, the establishment process of the association may take longer than one year due to incorrect information entry and incomplete file submission.
What Is AMC (Asset Management Company)
The AMCs are a for-profit company that provides management and specialized administrative services to trade associations. The AMC model allows all non-profit organizations’ functions and services to be customized to meet specific goals. Briefly, AMCs provide their clients with unparalleled flexibility, agility, and financial advantages.
How To Prepare An Association Business Plan
In order to start a business, doing a preliminary study and preparing a business plan is a legal requirement and vital. If you create the business plan with a meticulous preliminary survey, it will be a roadmap for you in the company’s initial processes and operating processes.
If you’re going to start an association, just like businesses, you should spend time preparing a business plan. The business plan you need to prepare should be prepared according to Non-Profit Businesses.
The business plan, which should be prepared at the establishment stage of the association, should include the following essential parts:
a) Executive Summary: This is a brief summary of your business plan.
b) Products and Services: Associations often develop instruments to create value or protect the interests of association members.
c) Market Analysis: In this way, an association can potentially determine the audience to which it can deliver its services.
d) Marketing Plan: The marketing plan outlines the activities you will do to attract your members to your organization.
e) Operational Plan: The office, materials, and staff that the association will need are determined.
f) Organizational Structure: In this section, you will list the staff of the association, their roles, and how they are organized.
g) Financial plan: The association’s good financial status provides an advantage when applying for grants and loans.
The main source of income of associations is membership fees. While determining the association’s membership fees, the association’s expenses and the periodic budget required for the activities of the association should be carefully calculated. If membership fees are higher than necessary, it may lead to the loss of members. On the other hand, low membership fees may cause the association’s accounts to fall negative.
Income sources other than membership fees are:
- Conferences and Events
- Corporate Partnership/Affinity Programs:
- Continuing Education/Training (Professional Services)
Establishment Of The Association Board Of Directors
Associations are governed by an elected management committee or board of directors. Some states require a board of directors to be determined at the time of association formation. When choosing the members of the board of directors, it will be beneficial for teamwork to choose candidates who have managerial skills and can establish constructive relationships. When nominating candidates for the board of directors, try to find candidates with expertise and resources in different areas.
Association Board Of Directors:
a)Top Manager: President, Chairman of the Board, etc.
b)Secretary or Committee Chairperson: It is vital to hire someone to assist the association’s chairperson and take the meeting notes.
c)Treasurer: is authorized in money transfers, distribution of fees, expenditure, bill payment, etc.
The resources listed below can be scanned to find the professional employees to be recruited, namely the chairman of the board, the secretary, and the treasurer.
What are the advantages of association?
- Access to education and training.
- Enhanced benefits programs.
- Access to membership directories.
- Competitive advantage.
- Access to certification and licensing programs.
- Privileged access to industry events and conferences.
- Potential cost savings.
- Inside access to innovations and new developments.
Most associations fall into the 501(c)6 category, which covers all types of commercial leagues, including:
- Trade organizations
- Professional organizations
- Chambers of Commerce
- Real Estate Boards
- Trade Boards
- Professional Football Leagues
How Do Associations Benefit Their Members?
Associations can be established for many different purposes, but the main purpose is to carry out activities for the benefit of the members. We have listed the associations according to their purposes.
Information, research, statistics
Standards, ethics, certification
Forum to discuss common problems and solutions
Service/task orientation—opportunities for volunteering and community service
Community, network, “home,” identity, participation
Associations vs. Non-profits Organization
Associations are membership-focused organizations however
NOPs are the mission-focused organizations
The IRS tax definition of associations is 501(c) 4 or 501(c) 6, meaning that U.S. states grant tax exemptions to some associations and define others as non-tax-exempt professional associations. The IRS tax definition for NPOs is 501(c) 3. This means that NPOs are tax-exempt.
A single executive director may oversee more than one association. Generally, associations receive this service from “Association management companies” (AMC). NOPs have an Executive Director who is hired by the board of directors and must serve only in one NOP.
The members of the association elect the board of directors of the associations. In NOPs, the board of directors has the authority to elect its own members; that is, there is no NOP membership, and no members determine the board of directors.
Association regulations and policies may require membership approval and are rarely done. The board of directors can easily change bylaws and policies in NOPs.
Characteristics Of Association
a) An association is basically a group of people who have come together for some common purpose.
b) Association refers to an organized group of people.
c) Association refers to the group of individuals with common goals and objectives.
d) Association is an organized group based on certain rules and regulations
e) The association results from the cooperative spirit of some organized individuals.
f) Membership in an association is voluntary in nature.
g) Some associations may be temporary while others may be permanent. (sports club associations)
h) The association is an organization with a legal status with responsible members.
i) some officeholders manage the affairs of an association and guide its operation.
j) The association is an artificial creation. Some individuals deliberately form alliances to achieve their common goal.
k) The association is important as long as it serves the purpose of the members. It loses its importance when it does not serve its purpose.
l) Association performs a variety of functions for its members as well as for society.
Association vs. State
The state is an association in its basic elements, but there are big differences between the state and other associations. The state has a ubiquitous, compulsory, permanent, and theoretically omnipotent structure within a country’s borders. Other associations are organizations with limited scope, procedures, and functions. It is the state that maintains and enforces order among other unions within its borders. For this reason, one of the definitions of the state is “union of associations”.
a) The state is essentially a regional organization.
b) Membership in the state is mandatory, but leaving citizenship is an option.
c) Citizens can be members of as many associations as they want, but they can only be members of one state at a time.
d) The state is a permanent entity; other associations are likely to be permanent.
e) The state represents the common interests of the people, associations represent the interests of a particular group.
f) The State may take coercive measures to enforce its rules. Associations do not have a sanction on their own.
Circumstances That May Lead To The Dissolution Of The Association
a) If the association’s establishment is realized and there is no reason for the association to continue its existence after it is realized, the association is closed. For example, after a disaster in a region, an association established to distribute aid to the people living in the region is closed after all problems are resolved, and the aid process is completed in the region.
b) If the founding purpose of the association has become impossible or useless, the association may be dissolved. For example, an association established to save an endangered bird species in a region is closed down if that bird species become extinct.
c) In case the first general assembly meeting of the association is not held within the time stipulated in the law, and the compulsory organs are not formed, the association is dissolved. While such clauses may vary between states, the sanctions and penalties an association faces for problems with its operation differ between local governments.
c) If the association is insolvent in paying debts, the association may be closed.
d) Establishment of the board of directors becomes impossible in accordance with the statute,
e) Ordinary general assembly meetings cannot be held twice in a row.
Largest U.S. Professional Associations Which of the following countries is its member?
- National Association of Realtors 720,000 members
- American Bar Association 380,000 members
- American Institute of Certified Public Accountants 330,000 members
- American Medical Association 300,000 members
- Institute of Electrical and Electronics Engineers 274,000 members
- American Registry of Radiologic Technologists 221,000 members
- National Council of Teachers of Mathematics 215,000 members
- American Nurses Association 210,000 members
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