- Community Amateur Sports Club
- Charitable Status
- Unincorporated Organisations
- Online Module: Organisation Structures
- Workshop: Introduction to legal structures
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To protect their committee and members, more and more clubs are choosing to separate the legal identity of their club by becoming incorporated.
Being incorporated allows the club to enter into contracts in its own right and offers protection for club members. Below are the different types of incorporation your club could adopt:
- Separate Legal Entity. This allows the club to enter into contracts and hold assets or investments in its own name
- Limited Liability. Members are protected and only required to pay an agreed sum (typically £1) if the club becomes insolvent. Having limited liability will protect the directors (of the company) and members against a claim, provided the directors have been compliant with company law requirements.
An advantage of a CIC include is that it provides a clear, limited company structure, for clubs wanting to be seen as social enterprises rather than a charity. The rules, including the assets lock and community benefit test, provide clarity and focus on what it means to be of benefit to the community.
CICs offer no tax reliefs but have additional administration requirements. The CIC regulator has more information and step by step guides on CICs here.
Cooperative and Community Benefit Societies are regulated by the Financial Conduct Authority (FCA). Refer to the FCA website for more information.
CIOs are regulated by one body – the Charities Commission – and therefore can be simpler to administer than clubs set up a company with charitable status. The latter would have obligations to both Companies House and the Charities Commission.
In order to register as a CIO, the objects must be exclusively charitable and meet the public benefit test.
If all of the club’s income is to come from gifts and grants then a CIO model may be appropriate. But it restricts fundraising if the club wanted to develop property or land that could be borrowed against.
The main advantages of a CIO are:
- They provide a separate legal entity for the club and offer members limited liability
- It may reduce administration in comparison to a charitable company.
- The reduction in administration over a charitable company may not be significant
- As a relatively new structure it is less well known and understood by third parties including banks and local authorities, but this is gradually changing.