What are Trade Associations?
“A trade association may or may not have the share capital. If it does not have the share capital, its financial requirements are met by combination subscription fees. It prepares its own memorandum and articles of association or bye-laws for regulating its working.”
A trade or industrial association may be described as a voluntary association of business units operating in the same field for the promotion of their common economic interests. This kind of organization is deemed to be non-profit and cannot be involved in any kind of business activity.The member units of such associations do not lose their separate entity and the association does not interfere in their internal functioning in any way. The main object of the association is to protect the common interests of combining units.
The working of trade association is similar to that of an ordinary company form of the organization. The representatives of the member units elect board of directors to supervise management of the association. The office bearer retires at the annual general meetings and can seek re-elections.
A trade association may or may not have the share capital. If it does not have the share capital, its financial requirements are met by combination subscription fees. It prepares its own memorandum and articles of association or bye-laws for regulating its working. The documents contain the power and duties of the office bearers.
These associations are established to look after the interest of the members. They aim at encouraging friendly communication among members. The membership of trade associations is voluntary and non-profitable. The members are bound to protect the interests of the whole line of activity.
The associations are generally named after the nature of trade or industry conducted by the combination of members. The members are free to carry on their business, as they like. The association does not interfere in the working of the units. Members arbitrate disputes amongst their members.
Thus unnecessary litigations are avoided. Members of trade associations try to fix uniform and fair prices and also ensure fair trade practices on the part of their members. They promote scientific research and make the results available to the members.
They provide legal advice to the members in matters like costumer regulation and factory legislation. They collect, compile, analyze and disseminate business and technical information. Such associations also carry out procedures like research and other related activities
Author - DeeKay
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