Incorporation of Montagu and North Fenham Boys Club

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Montagu and North Fenham Boys Club has operated in the Fenham ward of Newcastle upon Tyne for over 60 years.  The Club runs representative teams from under 6s to under 18s, including 5 girls’ teams.  Football coaching is available to children from aged 3 upwards. It is part of the fabric of grassroots football in the city and counts Michael Chopra, Kevin Richardson and Newcastle United assistant manager, John Carver, among its former players.

The Club started as an unincorporated association club and was reformed as a charitable trust in 1962, adopting a trust deed as its governing document, with objects providing for the welfare of children and young people in the Slatyford area of Newcastle and other city wards. The Club occupies and operates from a single site base in Slatyford which comprises an indoor 5aside pitch and common room.  The property is owned by the Local Authority and leased to the National Association of Clubs for Young People (NACYP). NACYP acts as the custodian trustee of the property (holding the legal title) and the club became the managing trustee (assuming all responsibilities for occupying and managing the property) approximately 40 years ago.

Since the legal structure of the Club was that of a charitable trust, it did not have a separate “legal personality” which means the Club could not hold property or employ staff or enter in to contracts in its own name.  All of these essential parts of running a grassroots club had to be done by and in the names of the board of trustees, acting on behalf of the Club and its members. This can cause problems as trustees come and go (by retirement, resignation, death or otherwise) which means interests in property in particular have to be assigned to the continuing members of the board in such circumstances.

In terms of liability, the Club’s unincorporated status also meant that the board members of the Club would be jointly and severally liable for any liabilities of the Club which it was not possible to satisfy from the Club’s assets.  The Club also wished to develop new facilities since its existing Clubhouse had become dilapidated and in need of substantial repair. This would require the Club to engage builders and enter in to contracts, which are ultimately arrangements which carry elements of risk.

It was therefore concluded that the charitable trust was no longer an appropriate legal structure through which the Club should carry on its operations for the benefit of the local community.

The Club considered the available options and concluded that a charitable company limited by guarantee would be the best legal structure for the Club to adopt in order to safeguard its future operating activities, allow it to contract in its own name and limit the liability of the legal members of the Club.

The new governing document of the Club would be the new company’s articles of association. The Club would be renamed as “Montagu & North Fenham Football Club,” as it had in practice become known locally. The trustees would perform a dual role in the new company, as both company directors and legal members. This allows the trustees to effect decisions at both board and member level,  as appropriate, whenever they meet. Certain key decisions under English company law are reserved to the members for approval (e.g. changing the articles of association, changing the name, winding up etc) and therefore it is common in charitable companies for the trustees to be able to be engaged to perform this dual role.

In terms of the wider club membership, the articles provided expressly for the board to adopt rules and bye laws from time to time addressing the admission, classification and benefits of subscribing members from time to time. This allows the members to remain engaged in the Club and be able to make representations to the board, including the nomination of trustees.

The new company applied for and was awarded charitable status by the Charity Commission in 2012. The assets and undertaking of the original charitable trust were then transferred to the new company which started its operations the following season.

Any proposed change to the Club’s legal structure requires County FA consent so it’s important to factor this in to your conversion timeline and apply in good time.

As a charitable company, the Club is now in a position to be able to contract, employ staff and hold property in its own name.  It has retained its charitable status (albeit with a new registered charity number), all that has changed is the legal structure through which the Club carries on its sporting activities which are so vital to the local community.

Chair of Trustees, Neil Rowan, said: “Incorporating the Club has been a massive step for us and will allow us to develop it in so many ways, including by application for grant funding for the construction of new facilities. As a board, we were quite surprised to discover the personal liability implications of remaining unincorporated, particularly in view of our future plans to develop new facilities,  so establishing the Club as a charitable company was the logical way forward for us. With professional support via The FA, the process is not as complicated or long as you may think. It’s certainly worth doing to ensure the Club is in the best possible place to improve the playing experience of local kids, as well as protect the board members who give up their time to run the Club free of charge.”

For more information on this case study please contact Tony Brumwell, Secretary on 0191 275 0676.