How to Structure a PMA or Unincorporated Entity

A Practical Guide to Building a Private Governance Framework

Educational content only. Not legal, tax, or financial advice.

Introduction

Private Membership Associations (PMAs) and unincorporated entities including unincorporated ministries and churches are often discussed in abstract or ideological terms. In reality, they are governance structures. Their effectiveness depends entirely on how carefully they are formed, documented, and operated.

This guide explains how to properly structure a PMA or unincorporated entity, what documents are required, how governance should function, and what risk management principles must be in place for lawful and disciplined operation.

The central principle is simple:

Structure determines exposure. Documentation determines durability. Conduct determines legitimacy.

Part I - Foundational Concepts

1. What Is a PMA?

A Private Membership Association is an organization formed by private agreement between members. It operates through contract law rather than through statutory public-benefit frameworks.

Key characteristics:

  • Membership-based participation

  • Private agreements govern activity

  • Services limited to members

  • No public offering of regulated services

A PMA is not a “license substitute.” It is a private governance framework.

2. What Is an Unincorporated Entity?

An unincorporated entity is an organization that has not filed articles of incorporation with the state. It may include:

  • Unincorporated associations

  • Unincorporated ministries or churches

  • Ecclesiastical bodies

  • Operating Trusts

Unlike corporations or LLCs, these entities are formed through agreement and governance documents, not state charter.

However, lack of incorporation does not eliminate compliance obligations. Activity still governs exposure.

Part II - Core Structural Documents

Whether structuring a PMA or an unincorporated ministry, the documentation framework is critical.

1. Founding Charter / Articles of Association

This document establishes:

  • Name of the organization

  • Purpose and mission

  • Founding authority

  • Private status declaration

  • Governance structure

  • Amendment procedures

  • Dissolution process

Clarity at formation prevents disputes later.

2. Bylaws or Rules of Governance

Bylaws operationalize the charter. They define:

  • Roles (trustees, stewards, officers)

  • Voting procedures

  • Meeting requirements

  • Quorum rules

  • Authority limits

  • Conflict of interest policies

Without bylaws, governance becomes informal - and informal governance increases liability.

3. Membership Agreement (For PMAs)

A properly structured PMA requires a written membership agreement that includes:

  • Voluntary participation acknowledgment

  • Private status notice

  • Scope of services

  • Informed consent

  • Dispute resolution process

  • Limitations of liability

Membership must be documented, not implied.

4. Statement of Faith (For Ministries)

If structuring as an unincorporated ministry or church, include:

  • Statement of faith or doctrine

  • Ecclesiastical authority framework

  • Ministerial structure

Courts evaluate substance over label. The organization must reflect genuine religious purpose in governance and operation.

5. Fiduciary Appointment Documents

Trustees and officers should sign written appointment and acceptance documents outlining:

  • Scope of authority

  • Fiduciary duties

  • Conflict disclosure requirements

  • Term length

Authority should never be assumed. It must be documented.

Part III - Operational Structure

1. Governance Discipline

Maintain:

  • Meeting minutes

  • Financial ledgers

  • Decision logs

  • Conflict disclosures

Documentation demonstrates seriousness and good faith.

2. Financial Structure

Even private entities must maintain clean accounting.

Best practices include:

  • Separate bank accounts

  • Clear classification of funds

  • No commingling with personal accounts

  • Transparent expense tracking

If payments are made to individuals or vendors, reporting obligations may arise depending on facts and activity.

3. Risk Management

Recommended considerations:

  • General liability insurance

  • Professional liability (if offering advisory services)

  • Directors & Officers (D&O) coverage

  • Event insurance (if hosting gatherings)

Private status does not prevent lawsuits. Governance reduces exposure. Insurance mitigates financial risk.

Part IV - Where These Structures Work Best

PMA Is Often Appropriate For:

  • Member-only education circles

  • Spiritual development groups

  • Private wellness collectives

  • Peer mentorship networks

Unincorporated Ministry Is Often Appropriate For:

  • Worship communities

  • Faith-based counseling

  • Religious retreats

  • Ministerial education

These structures are less suitable for:

  • Public retail businesses

  • Heavily regulated industries (medical, securities, insurance)

  • Public grant-seeking organizations

Part V - Common Mistakes

  1. Treating a PMA as a loophole

  2. Offering public services while claiming private status

  3. Ignoring fiduciary responsibilities

  4. Mixing personal and organizational funds

  5. Misrepresenting tax treatment

Misalignment between structure and activity is the primary source of risk.

Final Guidance

Structuring a PMA or unincorporated entity is not about avoiding regulation, it is about aligning governance with mission.

Private governance requires:

  • Clear documentation

  • Transparent fiduciary conduct

  • Financial discipline

  • Honest public representation

Strong structure protects people, not just paperwork.