Associations and Clubs Distinguished From Partnerships and Corporations

Generally, associations and clubs formed for profit are equated with partnerships.  The members of such associations organized for profit are considered partners.   However, when associations or clubs are formed for purposes that can be classified as moral, benevolent, social, patriotic, or political, they are not equated with partnerships.  The members of these associations will not be considered partners although they also perform business functions and are conducted partly for pecuniary gain.  Thus, to a certain degree, an association is a partnership.[i]  However, just because persons associate to form a corporation, it does not automatically make them partners.  In order to be treated as a partnership, there should be an agreement or intention to enter into such a relation.[ii]  Generally, the term “association” includes a corporation.[iii]  However, this will depend upon the context and the subject matter of the law and the intention of the relevant statute.

[i] Schumacher v. Sumner Tel. Co., 161 Iowa 326, 331 (Iowa 1913)

[ii] Doyle-Kidd Dry Goods Co. v. A. W. Kennedy & Co., 154 Ark. 573 (Ark. 1922)

[iii] St. John’s Military Academy v. Edwards, 143 Wis. 551, 555 (Wis. 1910)


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