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Incorporating Your Sports Club, What You Need to Know

  • Admin
  • 6 minutes ago
  • 3 min read

Many sports clubs still operate as unincorporated associations. It feels simple. It feels familiar. It also carries risk.


If your club is not incorporated, you and your fellow committee members could be personally liable if something goes wrong.


This is not theoretical. Trustees and committee members have been sued personally for £50,000, £85,000, even £800,000 when contracts or employment issues went wrong ClubStructureIncorporation.


If your club owns property, employs staff, runs events, or signs contracts, you need to look seriously at incorporation.


What does incorporation mean?


Your legal structure is how your club is viewed in the eyes of the law


An unincorporated club:


  • Has no separate legal identity

  • Cannot hold assets in its own name

  • Enters contracts in the name of individuals

  • Exposes members and committee to unlimited liability


An incorporated club:


  • Is a separate legal entity

  • Can own property and enter contracts in its own name

  • Provides limited liability for members

  • Must meet formal legal and reporting requirements


In simple terms, incorporation separates the club from you personally.


Which structure is right for a sports club?


For most community sports clubs, the most common option is a Company Limited by Guarantee, often called a CLG.


A CLG:


  • Has no shareholders

  • Has members who guarantee a small amount, often £1 or £5

  • Is registered at Companies House

  • Files annual accounts and confirmation statements ClubStructureIncorporation Guidance on Incorporating a mem…


This structure suits not for profit clubs that want protection and credibility.


If your club wants charitable status, you may look at:


  • A CLG with charity status

  • A Charitable Incorporated Organisation, known as a CIO

  • In Scotland, a SCIO


Charity status brings benefits such as 80% mandatory business rates relief, corporation tax exemptions and access to Gift Aid.


CASC status can also provide business rate relief and tax exemptions, with over £100 million saved in business rates and £12 million in Gift Aid relief across clubs.


The right choice depends on your income, assets, trading activity and long term plans.


When should you incorporate?


Incorporation is generally suitable if your club:


  • Owns buildings or significant assets

  • Employs staff

  • Enters contracts

  • Applies for loans or major grants

  • Takes on leases

  • Runs events with financial risk


If you are a small club with no assets, no staff and minimal risk, you may decide to remain unincorporated. Many clubs, however, have grown beyond that point without reviewing their structure.


What does the process involve?


Incorporation is more than filling in a Companies House form.


You will need to:

  1. Choose the correct structure

  2. Draft new Articles of Association or a constitution

  3. Appoint directors or trustees

  4. Transfer assets and liabilities from the old club to the new entity

  5. Update contracts, leases and licences

  6. Inform your bank, governing body and HMRC


If transferring from an unincorporated club to a CLG, members usually vote to transfer all assets and liabilities to the new company. When handled correctly, this can be done without triggering capital gains or corporation tax.


If you are forming a CIO, you must apply to the Charity Commission. They assess each application in detail and can refuse poorly prepared submissions.


There are ongoing obligations. An incorporated club must:


  • File annual accounts

  • Submit annual returns or confirmation statements

  • Keep director details up to date

  • Comply with company or charity law


Failure can result in penalties or prosecution


Common mistakes clubs make


  • Treating incorporation as a paperwork exercise

  • Failing to transfer land properly

  • Forgetting to update leases or alcohol licences

  • Not aligning the new constitution with CASC or charity requirements

  • Underestimating member engagement


Incorporation is a strategic decision. It shapes how your club operates for decades.


Questions you should ask now


  • How much are your assets worth?

  • Do you employ staff?

  • Are contracts signed in an individual’s name?

  • Would your committee members be comfortable facing a legal claim personally?

  • Do you plan to apply for major grants in the next five years?


If you hesitate on any of these, you need to review your structure.


How we can help


At Club Development Solutions, we guide clubs through the full process:


  • Reviewing your current constitution and legal position

  • Stress testing risk exposure

  • Recommending the right structure, CLG, CIO, SCIO or Community Benefit Society

  • Drafting compliant governing documents

  • Planning asset transfers

  • Supporting member consultation

  • Aligning incorporation with CASC or charity status where appropriate


We also provide a structured incorporation checklist covering membership, assets, staff, governance and tax position so nothing is missed Incorporation

Incorporation is not about adding admin. It is about protecting your people, strengthening governance and positioning your club for growth.


If your club has grown in size, income or ambition, your structure needs to match.

Get in touch if you want a clear, practical assessment of whether incorporation is right for your club and how to do it properly.

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