“ARE WE ALL FIT FOR PURPOSE?” 28 FEBRUARY 2009 AIRTH CASTLE HOTEL Iain Smith

1. “ARE WE ALL FIT FOR PURPOSE?” 28 FEBRUARY 2009AIRTH CASTLE HOTEL Iain Smith

2. What is a local sports council?

3. What is a local sports council? • Generally an unincorporated association!

4. In summary an unincorporated association has:

5. In summary an unincorporated association has: • No legal status except for tax! • No private law capacity. • Individual members who retain their own legal capacity and liability.

6. In practical terms this means that legally local sports councils cannot:

7. In practical terms this means that legally local sports councils cannot: • Enter intocontracts. • with some or all of members. • of employment - liability is generally with a committee. • with third party organisations or individuals.

8. Sue or be sued by others. • Personal liability rests with office bearers or membership as a whole depending on level of responsibility assumed. • Sue or be sued by members. • No remedy for members against club, committee or membership as a whole. (Cannot sue yourself!). • Remedy is against the individual responsible.

9. Own property. • Property owned jointly between members. • Cannot be disposed of without unanimous agreement of members.

10. So Who Is Liable?

11. So Who Is Liable? • Individuals who created the liability. • The management committee. • All of the members of the association? • All of the members who authorised the act. • Answer – Could be all or none

12. The current law is:

13. The current law is: • Unclear. • Provides uncertain levels of liability for members. • Confusing for creditors. • Cumbersome for property ownership.

14. Recommendation

15. Recommendation • Individual local sports councils, and those involved with their management, should very seriously consider the implications of not having legal personality.

16. With legal personality a local sports council can:

17. Contract • Enter a contract on its own behalf. • Contract with individual members. • Limit liability to the local sports councils funds. • Personal liability remains however, should an individual:- • Fail to disclose they are working as an agent • Exceeds the authority given to them • Enters a contract by misinterpretation.

18. Negligence • Sporting organisation liable for authorised costs of its representatives. • No liability for office bearers or members. • Individual wrongdoer remains personally liable.

19. Property • Sports organisation could own its property, no need for Trusts.

20. Current forms of non-profit organisations

21. Current forms of non-profit organisations • Unincorporated associations. • Companies:- • Limited by shares or by guarantee • CIC • (SCIO) (future). • Trusts. • Industrial and provident society. • (All can potentially be charitable)

22. Why a Company Limited by Guarantee • Liability usually limited from £1 to £10. • Flexible structure. • Straightforward to administer and alter. • Cost effective.

23. Business Transfer • Migration • Employees • Funding • Third party contracts • Sponsorships

24. How to become a Company Limited by Guarantee • Memorandum of association. • Articles of association. • Details of first directors and secretary (if any). • Statutory declaration that the requirements of registration have been complied with.

25. On going commitments • Companies House • annual return • annual accounts • changes to directors details. • Directors have statutory duties.

26. Summary • Think about the legal status of your local sports council