In the UK,
there is no single recognised legal structure required for national governing
bodies (NGBs) of sport. Some countries, like France and Germany, have a
specific legal structure which set out the governance requirement for all NGBs.
National
governing bodies of sport in the UK can choose their own bespoke
legal form which will be one of the following:
- Unincorporated
associations;
- Trusts;
- Limited
companies;
- Community
interest companies;
- Charitable
incorporated organisations.
Each legal
form imposes different requirements and statutes on the organisation.
Therefore, the board structures and requirements will vary in accordance to
which legal structure an NGB has chosen.
For example, if the NGB is a registered charity then it will be regulated by
the Charity Commission and certain requirements in relation to trustees will be
mandatory. But if the NGB is registered as a company, then it will need to
comply with the 2006 Companies Act and it will be regulated by Companies House.
National
governing bodies will, in most of the cases, operate as not-for-profit
organisations. Consequently, any surpluses will be reinvested into the NGB for
the purposes of the NGB rather than being driven by the need to maximise profit
for shareholders and/or owners. Regardless of being not-for-profit the NGB will
still have to conform to the same legal requirements as private for-profit
companies organised within the same legal structure.
To comply with HM Revenue & Customs (HMRC), your organisation must ensure
that it has the correct legal structure.
It's worth examining which structure best suits the way your organisation
operates as this will affect:
- The tax
and National Insurance that you pay;
- The
records and accounts that you must keep;
- Your
financial liability in the event of insolvency;
- The
ways your business can raise money;
- The way
management decisions are made about the business.