Private Membership Associations

Information Trina :-) 22 November 2023

Private Membership Associations (PMAs) offer a distinctive framework for individuals and entities seeking a more autonomous approach to governance and operations. Rooted in the principles of freedom of association, PMAs operate outside the usual public-commercial domain, allowing members to engage in activities, exchange services, and share resources under mutually agreed-upon rules and standards. This structure provides a unique opportunity for members to preserve their rights and interests, while fostering a community built on shared values and objectives. Ideal for those who value privacy and self-determination, PMAs present an innovative way to manage and protect assets, interests, and collaborations.

In October 2021, Trina interviewed Dr. Amandha Vollmer on how she has successfully run her business in the private for many years:

Is a PMA structure right for you?

Private Membership Associations (PMAs) are a unique form of organisation, and understanding their operational concepts and considerations before setting one up is crucial. Here’s a breakdown:

Operational Concepts of PMAs

Autonomy and Governance: PMAs operate independently of standard commercial and governmental oversight. They are governed by their own set of rules and bylaws, which are agreed upon by the members.
Membership-Based Structure: Only registered members can participate in the PMA. This exclusivity allows for more controlled and private operations.
Freedom of Association: One of the fundamental principles of PMAs is the freedom of association, which allows individuals to collectively pursue common interests or activities without external interference.
Privacy and Confidentiality: PMAs often provide a higher degree of privacy compared to traditional business entities. Member information and activities within the PMA are generally kept confidential.
Self-Regulation: PMAs self-regulate based on the rules and standards set by their members, which can differ significantly from public regulatory standards.
Service Exchange: Members can exchange services and resources within the framework of the PMA, often bypassing traditional commercial transaction norms.

Considerations Before Setting Up a PMA

Purpose and Objectives: Clearly define the purpose and objectives of the PMA. This will guide its operations and the formulation of its rules and bylaws.
Legal Compliance: While PMAs enjoy certain freedoms, they must still operate within the bounds of the law. It’s essential to understand the legal implications and requirements in your jurisdiction.
Membership Criteria: Decide on the criteria for membership. This includes who can join, the process of joining, and any obligations members must fulfill.
Governance Structure: Establish a governance structure that outlines how decisions are made, how conflicts are resolved, and how rules are enforced.
Financial Management: Consider how the PMA will be funded and how financial transactions will be managed. This includes dues, fees, and handling of communal resources.
Risk Management: Identify potential risks, including legal, financial, and operational risks, and develop strategies to mitigate them.
Exit Strategy: Have clear guidelines for how members can exit the PMA and how their departure will be handled.
Documentation and Record-Keeping: Maintain thorough records and documentation, including membership records, financial transactions, and minutes of meetings.
Community Engagement: Consider how the PMA will engage with its members and foster a sense of community and shared purpose.
Asset Holding: Any assets that are owned by the PMA become the property of the members. If your business has substantial assets, you would be wiser to put them in to a foundation trust and use a PMA for the management of the membership. The PMA could lease the assets from the foundation trust.