5 Legal Requirements When Starting a Sports Club (2021 Update)
When starting a sports club, there are some legal issues you need to consider. Find out the legal requirements for setting up a sports club here.
When starting a sports club, there a few legal hurdles you need to overcome in order to ensure that it’s operating legally. In this article, you’ll learn five essential legal obligations you should consider during this process.
The five essential legal obligations covered in this article are inclusive of:
- 1 – Determining if you want to incorporate
- 2 – Determining the size and type of club you want to set up
- 3 – Choose a name for your sports club
- 4 – Create rules & a purpose for your organisation
- 5 – Vote to incorporate
Although we’ve provided you with an extensive list of legal obligations, we’re not saying that this list is exhaustive. But, it is a great place to start and take the guesswork out of your legal requirements.
1. Determine if you want to incorporate
The first thing course of action when starting a sports club is to determine if you want to incorporate your new organisation. Incorporation will give your organisation an independent legal structure. This means that you won’t be personally responsible for the club’s debts and liabilities.
As a legal entity, it remains in existence even if the members change. Once incorporated, your sports club can enter into contracts in its own name, borrow money, and make purchases. The advantages of incorporating your organisation include:
- Individual members, including you, are not personally liable for the actions of the sports club;
- Improved fundraising ability and increased eligibility for grants. Many local councils insist on your club being incorporated before allocating funds; and
- Enhanced ability to borrow money, open bank accounts and enter into leases.
2. Determine the size and type of club you want to set up
To become an incorporated association your sports club must:
- Have at least five members
- Not operate for the profit of its members (although an incorporated association can provide services or benefits to its members)
3. Choose a name
You must choose a name for your sports club that reflects the purpose of the association. It must:
- Not be identical or similar to one listed on the Organisations and business names register on the Australian Securities & Investments Commission website
- Have ‘Pty Ltd’ or ‘Pty Limited’ at the end of its name
4. Create rules and a purpose for your organisation
In order to register your sports club as an incorporated association, you must have a written set of rules, or constitution. The rules must include the association’s purpose. This is what your association intends to achieve. For example, the purpose for a junior tennis association may be:
- To provide an opportunity for the youth of our area to participate in tennis and enhance their health, fitness and wellbeing through organised sport
- To provide for the health, welfare and wellbeing of players, supporters and spectators
5. Vote to incorporate
In order to incorporate your sports club, you must hold a meeting to vote on whether to do so. Each member must be given at least 21 days notice of the meeting.
At this meeting, a majority of votes cast by members must:
- Authorise a person, who is at least 18 years old and lives in Australia, to incorporate the association; and
- Approve proposed rules that comply with the Act, or approve adoption of the model rules.
6. Time to set it up
Once you go through the steps above, you’ll be well on your way to setting up your sports club. Incorporation will ensure that you are protected from liability of the actions of your club.
Although we’ve provided you with an extensive list of legal obligations, we’re not saying that this list is exhaustive. For individual case, there will be extraordinary and different circumstances with them all. Therefore, we recommend contacting a specialist business lawyer to walk you through your needs.
Rhys is a Paralegal at Lawpath in the content team. Pursuing his interest in digital marketing and commercial law, he has completed a law degree at the University of New South Wales and is involved in online media.