Incorporated societies

13 May 2014

Club structure, focusing on incorporated societies.

Club structure

Establishing the type of structure for the club is a bit like getting the financial management club underway - it sounds daunting but it's not if you have the right checklist and process to follow. To start with, you'll need to have a clear idea of the kind of structure your club will have. Your club's structure will be determined by:

  • the size of club and any potential for growth
  • the amount of flexibility you'll need as the club grows and matures
  • the culture and values that you want the club to have
  • the extent of the club's activities, for example, fundraising, tournaments etc
  • the type of management structure the club is governed by
  • funding - how much, where from and what for?
  • responsibility and accountability - who's in charge, who's liable if things go wrong?
  • financial monitoring and accountability.

Incorporated societies and charitable trusts

Most large sport and recreational clubs choose to have 'formal' organisational structures and register their organisations as such. The most popular structures are incorporated societies and charitable trusts. There is no need for a formal structure, but these structures protect individual members in certain situations and give your organisation the right to sign contracts, lease premises, operate bank accounts and apply for government grants.

However, please remember that incorporation does not prevent legal action being taken against individual members for negligence in any circumstances. Incorporation of a club means that it becomes a legal identity separate from its individual members. Put another way, the association is considered by law to have a distinct identity that continues regardless of membership.

Benefits

The benefits of an incorporated society's structure include the ability to:

  • create documents in the club's name
  • enter into contracts in the club's name
  • buy, sell, own, lease and rent property subject to the club's rules
  • borrow money and give securities subject to the club's rules
  • sue and be sued in the club's own name.

To set up your sporting club as an incorporated society you'll need to register it with the Companies Office (Ministry of Economic Development).

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