Sometimes associations merge and sometimes they separate.
Here at the AMC we have recent experience of helping one of our clients successfully re-form as two independent trade associations with the only common link between the two after the transition being the AMC providing the association management services to both.
This client was focused on one particular sector but had branched into another sector some 15 years previously. Although moving into this sector complied with the objectives of the association, it was no longer a key area of focus and the members with a key interest in that part of the association did not feel in control of their own destiny.
So, working alongside the board, we set about a plan to separate the two.
We did it by:
- Creating financial models to confirm that a separation would be viable
- Getting an agreement from the board that this was the best way forward for both sides of the association from market and member focus point of views
- Communicating the rationale of the change to the members
- Seeking an agreement to separate into two distinct associations by a special resolution at the AGM
- Developing new memorandam and articles of association for both entities
For the new association we were tasked with:
- Developing a leadership structure with election procedures
- Creating roles and responsibilities for directors, officers, and the leadership team
- Establishing terms of reference for new working groups and committees
- Setting up a new company and registering with HMRC
- Setting-up new insurance cover
- Registering with the Information Commissioner’s Office
- Setting up a bank account with appropriate signatories and authorisation levels
- Creating a Schedule of Delegated Authority (SODA) – read more here
Our key tips:
- Do not under-estimate the time it will take-a realistic timing plan is essential and so is managing expectations
- You cannot communicate with members enough – keep the updates coming throughout the process. Keep other stakeholders updated too
- Use the split as an opportunity to re-focus both associations on their objects
- Make the change at the start of a financial year
- Involve accountants, auditors, and solicitors at an early stage
If your association is considering a merge or a separation, you can rely on our expertise to help you every step of the way. Please call us on 01379 788032 or email firstname.lastname@example.org. We would be delighted to hear from you.