Many homeowners associations are unincorporated. The directors of these unincorporated associations must evaluate whether incorporation is actually to the advantage of their homeowners association. The purpose of this article is to outline the very real benefits of incorporation and to discuss some of the practical aspects of incorporating an unincorporated homeowner association. Incorporation is advantageous for a host of reasons, including clarity of operating rules, limited liability of members, centralized management, and contractual power. The cost of incorporation and inconveniences of corporate operation are greatly outweighed by the numerous benefits of incorporation. Associations contemplating incorporation should obtain advice and counsel from their attorney and their accountant.
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