Incorporating and Restructuring Community Amateur Sports Clubs

Many of us have some sort of affiliation with an amateur sports club, whether as a member, player, parent, helper or supporter. Some may even be even further committed and be directly involved in the management of the club itself as committee member.

If you fall into the latter category, there are some key considerations you need to be alive to. For example, you may not be aware that depending on the structure of your amateur sports club, you may be putting your personal assets at risk. This is because many community amateur sports clubs are structured as unincorporated associations whereby those in the management committee, are potentially exposed to personal liability if the club is unable to meet its financial obligations.

There are various options available to mitigate against this, for example through extensive risk management and expensive insurance policies. Whilst this would of course, minimise exposure to the risk, it would not eliminate all contractual and third party risk.

It is also important to consider that a club which is highly geared towards minimising risk, may not benefit its long term interests, for example with regards to expanding the club or building new clubhouses and other facilities. The risk of personal liability may also deter current committee members from continuing in their position and dissuade new members wanting to join, further hindering the longevity of the club itself.

Therefore a club should consider reviewing its legal structure of the club to ensure it is appropriate taking into account the club and its members’ immediate and long-term interests. From our experience, incorporating a club to a body corporate (usually a company) is most likely the most appropriate structure to convert to, given its limited liability status. Once incorporated there are also other restructuring options available to the club, for example, to implement tax efficient structures taking advantage of HMRC tax relief available to community amateur sports clubs; or to ring fence and protect the club’s assets and income from new projects such as construction of new clubhouses or the development of land.

Of course, each club is different and as distinctive as the club is to you personally, the legal advice surrounding it will be too. If you are looking for legal advice for you or your club, including in depth detail on the incorporation or restructuring processes referenced above. Please do not hesitate to get in contact with our expert Corporate & Commercial team. For more detail on incorporating or restructuring community amateur sports clubs, please download this guide.