Many sports clubs are formed, and continue to run, as a group of individuals bound together by common rules (or club constitution). These clubs are known as unincorporated associations.
An unincorporated association is particularly well suited to smaller, simpler clubs. This is the most common type of structure for an amateur club, largely because it is the easiest, cheapest and most informal way of forming a club. Typically these clubs would not employ staff, own significant assets (e.g. land, investments or facilities) or enter into significant contracts.
Below are some of the advantages and disadvantages of running a sports club as an unincorporated association:
- Simple administration. Unincorporated associations (unless also a charity) do not have the same legal and administrative requirements that companies have (e.g. the requirement to file accounts or an annual return).
- Flexible. The rules of an unincorporated association can be whatever they choose, provided they are lawful, and can be easily updated. Remember the rules of your governing body, or the requirements for grant funding, may need your Constitution to contain certain clauses.
- No separate legal identity. An unincorporated association is not separated from its members in the eyes of the law. This means committee members will have to enter into contracts, or hold assets, on behalf of the club, rather than the club itself. In the event of a claim against the club or breach of contract members of the committee, or wider club could be personally liable. If you want to enter into contracts, then you need to consider becoming Incorporated.
- Transfer of assets. As assets are held by individuals on behalf of the club, rather than the club itself, they must be transferred if that person leaves the club.