Does Your Community Civic Group Need to be Registered With the State

December 22, 2010

I’ve recently received an inquiry about the ability of an unincorporated association to file suit on behalf of the association. There are, of course, many types of groups which are true organizations that have bank accounts, enter into contracts and act in the same manner as a business might without being registered with the state. These groups might include sports teams, homeowners associations, civic clubs, some charitable organizations, or an online message board group. These associations are not necessarily small. An athletic conference or youth sports league could conceivably act as an unincorporated association as could a huge charity event that does not fall under 501(c)(3) protection.

Unincorporated nonprofit associations do have the right to be involved in civil litigation as associations in their own names, even if they are not incorporated with the state. This is interesting as there is also a statute in North Carolina which requires certain businesses to be registered with the state in order to file suit. North Carolina law also allows these unincorporated nonprofit associations certain additional rights, such as the ability to hold and transfer real and personal property and the ability to shield their individual members from personal liability. In short, you can obtain many of the benefits and protections of corporate status without actually being on file with the state – so long as you are a non-profit.

In order to be treated as an unincorporated nonprofit association such that they are eligible for this protection, the association must consist of two or more members joined by mutual consent for a common nonprofit purpose. This is a very broad definition: nothing must be in writing, the organization technically doesn’t even need to have a name.

If you are an organization that maintains funds, enters into contracts, but is not for profit, it may make sense for your organization to act as an unincorporated non-profit association as opposed to registering with the state. There are of course benefits to registering as well. To learn more about the benefits of each, contact Maginnis Law, PLLC for a consultation with an experienced civil lawyer. Maginnis Law, PLLC is a Raleigh business litigation firm that handles matters in Cary, Holly Springs, Morrisville, Wake Forest, Clayton and other surrounding areas of Wake County and Johnston County. Contact the firm at 919.526.0450 to speak with a business attorney about your matter or organization. Alternatively, visit our website at to get more information.

Liens on Funds in Construction Law

December 20, 2010

Contractors and property owners, understanding lien rights is pivotal to handling disputes on construction work from additions to your home to larger commercial builds. We’ve discussed liens on property in previous posts, but have not discussed liens on funds. Liens on funds essentially allow subcontractors to keep property owners from paying general contractors who fail to pay their subcontractors. These liens on funds are an important consideration for sub-contractors not being paid in a timely fashion by the general contractor, as well as for the property owners who are having work done. Read more

Warranties in Construction Litigation Disputes

December 15, 2010

The risk of construction litigation often begins with limited initial contracts consisting of a proposal for work that is signed by both parties.  These are enforceable contracts; the parties agree on the scope of the work that will be completed and the price.  However, there generally are not clauses which address breach of contract issues as there are in most business litigation matters.  This does not mean that those remedies do not exist, they are just enforced according to the statutory and common law of North Carolina.  So what is the recourse for a breach of a proposal/contract in North Carolina? Read more

Attorney Fees in Injury or Property Damage Cases

December 13, 2010

It is always frustrating for clients – and frustrating for me as their civil lawyer – when they are informed that in the U.S., parties generally bear the costs of their own attorney fees. Individual small businesses are faced with a tough decision regarding whether or not to proceed with civil litigation when faced with the prospect of paying their civil attorney fees. Read more

Fair Credit Reporting Act – Ability to Sue for Inaccurate Disputed Information

December 8, 2010

Many individuals have become aware of the Fair Debt Collection Practices Act, but less are aware of its companion consumer rights statute, the Fair Credit Reporting Act, or FCRA. FCRA provides consumers with rights regarding items on their credit report, including the ability to dispute certain items. As many unfortunate consumers have found out, it is not at all infrequent for consumers to have inaccuracies on their credit report. Read more

Change of Venue in Business Lawsuit

December 6, 2010

I occasionally get calls from businesses outside of the Raleigh, Cary, Wake Forest area but have received a summons in Wake County, Johnston County, Harnett County or other areas of the Triangle. These small business owners want to know if they can change the venue where the civil litigation is to be held – preferably to the county that they reside in. Read more

Wage Payments to Interns and Externs

December 3, 2010

Some business law clients have asked recently about the need to pay interns or externs. With students trying to pad their resumes and gain experience, those job opportunities can be invaluable to all parties. However, small businesses are still subject to the North Carolina Wage and Hour Act as well as the federal Fair Labor Standards Act if these individuals are not classified as trainees, but rather as employees. This means minimum wage and overtime restrictions. That is a big change from unpaid intern.
The Department of Labor has set forth some guidelines for when interns are actually employees. Employers need to satisfy all of the following factors in order to not pay their employees. Missing even one means that the individual will need to be paid.

1. The training is similar to what would be given in a vocational school or academic educational instruction.
2. The training is for the benefit of the trainees or students
3. The trainees or students do not displace regular employees, but work under their close observation.
4. The employer that provides the training derives no immediate advantage from the activities of the trainees or students, and on occasion the employer’s operations may actually be impeded.
5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period.
6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

Business owners, if you are contemplating using unpaid interns or externs, make sure that you set up your program to ensure compliance with the law, and avoid liability for unpaid wages to employees. Maginnis Law, PLLC has business attorneys who can consult small businesses regarding these issues or defend these companies in civil litigation suits filed against them. Maginnis Law, PLLC is a Raleigh law firm who practices in business litigation and other business law fields. The firm also takes cases in Cary, Morrisville, Apex, Clayton and the rest of Wake and Johnston Counties. Contact the firm to speak with a Raleigh lawyer at 919.526.0450 or visit our website at

Independent Contractor or Employee

December 1, 2010

Employers generally seek to have individuals working for them classified as independent contractors. There are financial benefits and limitation of liability benefits to the small business associated with this classification. Many parties use an employment agreement or an employee handbook which states to an individual, “you are an independent contractor.” Such a contract clause is helpful, but not necessarily sufficient. Business owners, you must treat these individuals as independent contractors in order to assure yourself the benefit of that classification. Read more

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