About Club Structure
It is important that your club is structured, from a legal perspective, in a way that best suits your needs now and in the future. A club structure can influence how a club is viewed by others (e.g. banks, funding providers, the public) and determines whether the club is treated as a separate legal entity (i.e. club members are not personally responsible for its debts). It is also important to consider that there are different rules and legal requirements depending on how a club is structured. Whatever structure or status a club chooses it is important for them to understand what the implications are, and it is advisable to consider updating the club’s constitution to reflect the structure of the club.
There are two main types of organisational status, unincorporated and corporated. Unincorporated includes company limited by guarantee, company limited by shares, community benefit society and charitable incorporated organisation.
Unincorporated are generally suitable if:
> Small local club
> Don’t own assets (property etc.)
> Don’t take on any contracts
> Not involved in high risk sport
> Protected fully through 3rd party insurance
Corporated are generally suitable if:
> Employ staff
> Apply for finance (loans or grants)
> Own assets
> Entering contracts
> Taking on a lease
> Buying buildings
Choose the appropriate structure for your club
> Do it once, do it right
> Register with HMRC if liable to Corporation Tax
> Get the right Directors
> Ensure your details are correct and up to date
> Use the correct details on correspondence / contracts etc.
> Know your ongoing obligations e.g. annual accounts, annual return.
I want to set up a club/group, how do I do this?
First ask yourself these questions:
1 Have you checked if there’s already a similar club in your area?
2 Do you know if there is the demand for a new sports club?
3 Are you clear about what you want to achieve with the club?
4 Do you have enough volunteers and coaches to help you?
5 Do you have a set of rules for your new club?
6 How will you look after the health and safety of your volunteers and members?
7 Do you have the relevant health, safety and welfare documents in place?
8 Have you thought about how your club will be structured?
9 Do you have access to the facilities you need?
10 Do you have ideas for funding your club?
11 Do you have a robust budget and plan to manage your funds?
12 Have you thought about how you’ll promote your club?
13 Do you know what your potential members want from your club?
For more information click here: https://www.sportenglandclubmatters.com/start-a-club-2/
What shall I do if I am considering changing my clubs’ structure?
> Use it as an opportunity to work out what the club is about and getting your constitution right
> Communicate it to appropriate people
> Consider different sections of your club
> Think long term
> Get the right people taking responsibility
> Give a clear timeline
> Talk to others (e.g. other clubs, Think Active)
> Seek legal advice
What is an unincorporated club?
An unincorporated club is a club that is formed and run as a group of individuals bound together by common rules (such as a constitution). This is the most common type of structure for an amateur club, typically one which does not employ any staff, own significant assets (such as land or facilities) or enter into significant contracts.
What is a charity?
> Regulated by the charities commission
> Can be any legal structure
> Has a minimum income of £5,000 a year e.g. funds and donations
> Need a board of trustees
> Not for profit – purely for charity purposes e.g. The advancement of amateur sports qualifies
How do I set my club up as a charity?
In order to become a charity, a club must be able to demonstrate it is set up with aims that are charitable, and that these aims are carried out for the benefit of the public. This may mean the club has to update its Constitution to include the charitable and public benefit purpose. If you set up your club as a charity and have income of more than £5,000 per year you must register with the Charity Commission. This does not apply to a charitable community benefit society which is registered by the FCA, with HMRC granting tax exemption. If the club has charitable purposes but intends to trade, for instance to sell tickets, merchandise or sell food and drink for a profit, it may have to consider a trading subsidiary. The Charities Commission has guidance to help clubs understand their obligations as a charity and what to do to meet these.
What are the legal entities our sports club or physical activity group could become?
There are two types of club structure, incorporated and unincorporated. The incorporated is a more formal structure and is recommended for ‘good governance’. For those that fall into this group they are usually registered as a Community Interest Sports Company. In addition to this a sports club can have status as a CASC or a charity, this is another factor that needs to be taken into account.
How do we go about changing our legal structure?
Once you have decided the best legal structure for your club you need to inform all members, the bank, your National Governing Body (NGB) and HMRC. Lastly, update the constitution of the club, contracts, trusts and deeds.
What are the benefits of being a Community Amateur Sports Club (CASC)?
> Business rate relief (Mandatory 80% relief)
> The ability to generate income through Gift Aid (individuals and companies)
> Exempt from Corporation Tax profits if:
> Trading income < £50k / year
> Rental income < £30k / year
> Exemption from Capital Gains Tax
What is the criteria to be a Community Amateur Sports Club (CASC)?
To register as a CASC your club must meet the following qualifying conditions and meet them on an ongoing basis otherwise the club may lose its CASC status and be subject to a de-registration charge:
> Once a CASC always a CASC – can’t change back
> Being open to the whole community
> Being organised on an amateur basis
> Encourage participation in a Home National Sports Council recognised sport
> Setting limits on the costs for members and level of income generation
> Fit and proper management
Find out more here
What is gift aid for sports clubs?
Gift Aid is a scheme which allows charities and Community Amateur Sports Clubs (CASCs) to claim from HMRC, the basic rate of tax their donors have paid. Gift Aid increases the value of donations by 25%, so it means even more money goes to the causes you care about – and it won’t cost you extra.
> For both CASCs and Charities
> What you can claim Gift Aid on is different for each
> If donors are higher rate taxpayers, they can benefit from tax relief
> Can claim back 25p in every £1 voluntarily donated. for every £1 donated, your club would receive £1.25
> Can also donate goods
> A gift Aid declaration form is required and must be returned to HMRC
For more information about gift aid click here
For more information on other funding sources, see our funding page
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