Club Structure
When establishing your club, the committee members will need to select the most appropriate form of legal structure for the organisation so that it can be formally recognised, open a bank account, enter into agreements for hiring facilities, and be accountable to the membership.
Below, we explore the main legal structure a new club should adopt, an unincorporated association.
Unincorporated Association
This is the most common structure used by the vast majority of sports clubs. The members come together and agree to establish the club with its own rules and operating procedures. These are then set down in the constitution. This is the simplest form of club structure, the easiest to run and operate, and the one that most members will be familiar with. It's an "Association" because the club does not have a separate and distinct legal identity. For legal purposes, the club is regarded as a voluntary coming-together of its members - literally, an association of members.
An Unincorporated Association structure is most suitable for:
• The majority of small local clubs
• Clubs without significant buildings, equipment, or financial assets
• Clubs that provide services primarily for their own members (rather than the general public)
• Clubs that are not engaged in high-risk sports where accidents are far more likely and potentially costly if negligence could be proved
• Clubs that protect themselves against third party liability and negligence through a standard insurance policy for their sport
One consequence that you should be aware of with this type of structure is that - on the rare occasions that something does go seriously wrong - ALL the members of the association are liable. So, if the club goes bankrupt, all the members could be liable for the debts, irrespective of their individual financial circumstances. Because this liability is unlimited, those with more wealth could be hit harder than those with relatively little money.
On the positive side, unincorporated associations are simple to set up and run. You don't need permission from anyone else. You create your own constitution and run your own affairs within these rules. With a constitution, you'll be able to open a bank account and organise your finances. If you want to borrow money, one of your members will probably need to provide the lender with a personal guarantee or security for the loan.
Most clubs are able to insure themselves against the more common risks and your National Governing Body is likely to offer an insurance scheme that you can join.
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