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An incorporated organization can enter into contracts, buy land, borrow money, have bank accounts, etc., in its own name. An unincorporated association is an agreement between individuals, and generally has no legal status. The members may be personally liable to the creditors for the full amount of any debts.
Unincorporated associations refer to groups of individuals who come together for a common purpose but do not form a legal entity. While these associations can be a cost-effective way for small businesses in British Columbia to operate, they also come with potential legal risks and challenges.
An unincorporated association is a group of people who have decided to do things together for a purpose or goal other than profit. When would you use an unincorporated association? Some groups don't need the legal protection from certain personal liabilities that a corporation provides.
An unincorporated association is defined as an association of two or more persons formed for some religious, educational, charitable, social or other non-commercial purpose.
Incorporating a business allows you to be taxed at a lower rate compared to the tax rate for individuals. Businesses that operate as sole-proprietorships or partnerships generally pay a higher personal income tax rate on profits as opposed to incorporated business.