Introduction

Before delving into an investigation as to the differences between an unincorporated association and an universitas, it is essential to have a basic understanding of the two concepts:

  • An unincorporated association is a voluntary association existing under the common law.  It is not a juristic person and cannot own immovable property for its own benefit because legally it has no separate existence apart from its members.
  • An universitas is also a voluntary association existing under the common law, however, in order for a voluntaryassociation to be recognised as an universitas, the common law requires the constitution of such association to specify that:
  • the organisation will continue to exist despite changes in its membership; and
  • the assets and liabilities of the organisation will be held separately from those of its members.

It is a juristic person that is fairly distinct from the members composing it, has the capacity to own property in its own name, enter into contracts in its own name and can sue or be sued in its own name. An universitas falls short of the definition of ‘company’ in the Companies Act No. 71 of 2008 (“Act”), and is therefore open to any voluntary association engaged in non-profit activities that wishes to carry on its activities as a juristic person without the many technical constraints and on-going compliance burdens imposed by that Act. 

Voluntary associations which can be classified as an universitas include, inter alia, building societies, co-operative societies, friendly societies, certain professional societies and body corporates of sectional title schemes in terms of the Sectional Titles Act No. 95 of 1986.

The Distinction

  • Some confusion exists in case law as certain judgments refer to an universitas as an unincorporated association due to the fact that it is not incorporated by statute or registration. Although an universitas is not incorporated as such, it is nevertheless a corporate body formed under the common law.  It can therefore never be referred to as an unincorporated association.
  • The court drew the following distinction between an unincorporated association and an universitas in the case of Webb & Co Ltd v Northern Rifles, Hobson & Sons v Northern Rifles 1908 TS 462 464–465:

“An universitas personarum in Roman-Dutch law is a legal fiction, an aggregation of individuals forming a persona or entity, having the capacity of acquiring rights and incurring obligations to a great extent as a human being. An universitas is distinguished from a mere association of individuals by the fact that it is an entity distinct from the individuals forming it, that its capacity to acquire rights or incur obligations is distinct from that of its members, which are acquired or incurred for the body as a whole, and not for the individual members.”

  • Roman-Dutch sources never mentioned that an universitas is based on contract. It is one of the distinctions between the unincorporated association and universitas in Roman-Dutch law, that the former is based on a contractual relationship among its members, while an universitas is a body with rights which are acquired for the entity and not for the individual members.
  • The property of an universitas vests in the universitas as a separate legal body. An universitas’s constitution may determine that property be held in the name of the universitas or alternatively, that it will vest in a trustee or other persons acting as representatives of the universitas.

In the case of unincorporated associations, immovable property may be registered in the name of the association, but because of the fact that no legal person exists, the members of the association will share limited co-ownership of the property. Usually the property will vest according to the constitution in a trustee or persons acting as representatives of the association. The rights which members may have in respect of the property of an universitas contrast those which members may have in the case of unincorporated associations. The members of an universitas only have a membership interest in the property due to the fact that the universitas, is the owner of the property. On the other hand, members of unincorporated associations are limited co-owners of the property unless it vests in a trustee or other person.

 Conclusion

As stated above, an unincorporated association is not a legal entity distinct from its members, while separate legal personality is one of the most significant features of an universitas. There are however exceptions; instances when an unincorporated association is deemed to possess specific attributes which stem from being a separate legal person. For example, the definition of a person in the Interpretation Act No. 33 of 1957 includes “any body of persons corporate or unincorporate”, which definition was relied on to support the finding that an unincorporated association was subject to the provisions of the Income Tax Act No. 58 of 1962.

 

[Sources:  Lexis Nexis,www.mylexisnexis.co.za]