Incorporation of Rugby Football Clubs

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Incorporation of Rugby Football Clubs
Friday 5 October 2007 Serena Hedley-Dent
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Constitutions used by RFCs

• Unincorporated Members Club
• Limited Company
• Industrial Provident Society

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Incorporation Why incorporate?

• An unincorporated club has no legal identity of
  its own
• As a result if it employs people or undertakes
  activities (eg organising matches), individuals
  (usually the Committee) will have to act on its
  behalf
• If the club holds property, it will have to
  appoint trustees to do so
• If claims are brought they would be against
  Committee members personally, who would be
  personally liable if the Clubs assets exceed the
  liability
• Rugby is a contact sport where risk of personal
  injury is high and therefore claims by players
  against clubs a real possibility

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Incorporation What form should a RFC take

• Two options for non-profit making members clubs
• Company Limited by Guarantee
• Industrial Provident Society
• In either case the RFC will have a legal
  personality of its own and as such can enter
  contracts, hold property, sue and be sued in its
  own name

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Are there disadvantages?

• Companies and IPS are regulated by Companies
  House and the FSA respectively
• The constitution and accounts will need to be
  lodged each year but these have to be filed
  with the RFU anyway
• The advantages OUTWEIGH the disadvantages

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How does an RFC incorporate?

• Incorporation involves establishing the new
  company and then transferring the existing assets
  and undertaking of the club to it
• Appoint a Steering Committee and decide timescale
  
• Tell your members that this is planned

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Incorporation Steps

• Prepare the Memorandum Articles using the
  relevant RFU template
• Apply for clearance from HMRC for the
  incorporation
• Prepare the resolution of the members to transfer
  the assets and undertaking to the new company
• Call and hold general meeting in accordance with
  your rules
• Follow up work

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CASC Status

• Finance Act 2002 tax reliefs for clubs which
  qualify as community amateur sports clubs
• Particular benefit to clubs with high rates
  capital gains or if will receive donations.
• There are restrictions on CASCs particularly in
  relation to paying players to play
• There are also criteria to meet to register as a
  CASC you will need to fill in an application
  form

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How does incorporation affect CASC Status?

• If you have CASC status already and decide to
  incorporate, you must register the new company as
  a CASC before the assets are transferred
• If you decide that you want to apply for CASC
  status at the same time as incorporating you will
  need to use the template constitution for CASCs
  and apply for CASC status (taking care not to
  amend the CASC clauses)
• HMRCs CASC department are happy to look at draft
  constitutions and your most recent accounts as
  part of the application

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Contact details

• Serena Hedley-Dent
• Farrer Co
• 66 Lincolns Inn Fields
• London WC2A 3LH
• 020 7917 7352
• 020 791 7293
• shd_at_farrer.co.uk