Reading time: 5 minutes

If you have been running a competition or training group for sport and are considering making it official, it’s important to consider what club structure best suits you. Obtaining a formal legal structure has many benefits including the ability to get insurance, rent out premises and affiliate with other sporting bodies. Regardless of whether you want to start a club, league, or federation, there are a few legal structures that you can choose. This article goes through the basics of each structure to help you determine what best suits your group.

Not-for-Profit Club Structure

This type of club structure does not generate profit for its members. Rather, these structures suit organisations that will put any profit back into running the organisation.

Company Limited by Guarantee (CLG)

CLGs are a typical structure for sporting bodies that operate on a national level. For example, national governing bodies of sports which have federated structures (i.e. a national governing body with state-level affiliates) use these structures. The reason for their commonality is because ASIC (Australian Securities and Investments Commission) regulates these bodies, which means that it can operate all across Australia.

A CLG is a separate legal entity. It can hold property in its name, and anyone may sue it. If you choose to set up a CLG, your organisation will need a constitution. You also have to register it with ASIC. The members will have to pay a nominal amount (around $20-$100) in writing, which becomes the property of the company. If you became a member of an existing CLG, the CLG probably incorporated the amount into your membership fee. If the CLG winds up, the liability of members is limited to the nominal amount that they have paid.

Incorporated Association

An incorporated association is a common structure for smaller sporting clubs that operate locally or within one state. The reason is that state law and state bodies like Consumer Affairs Victoria and NSW Fair Trading regulate them. An example of an incorporated association is VRI Fencing Club Inc, a sporting club that operates in Victoria.

You have to register incorporated associations with the state regulator. Hence, the process will be slightly different in each state. For example, if your incorporated association will be in NSW, you will need to put in an application form with NSW Fair Trading. The application needs to include:

  • The details of at least five members;
  • A copy of your proposed constitution; and
  • A statement of your association’s objects.

For-Profit Organisation

Some sporting clubs and leagues aim to distribute profits to members. While being for-profit can limit your access to some government grants and funding, it is suitable for sporting organisations that would like to have future growth similar to a business.

Public Company

Public companies are not a very common structure for sporting clubs and sporting leagues. However, they can suit large and wealthy professional sporting teams.

The most common publicly trading sports teams are founded overseas and include internationally renowned soccer clubs and some corporately owned American football and basketball teams. For example, Manchester United Football Club Ltd is a publicly trading company established overseas.

Part of the reason this is not a conventional structure in Australia or overseas is that sports governing body rules can limit a team or league’s ability to trade publicly. The cost of setting up as a public company and complying with ASIC regulation is also greater than other structures, so it may not be financially viable even if your group is large enough.

Proprietary Limited Company (Private Company)

Incorporating as a private company is a good alternative if you would like to operate your sporting club or league as a business. Sports leagues in Australia commonly use this structure. For example, the Victorian Dodgeball League Pty Ltd is an Australian private company.

The benefit of a private company structure is that the company will be a separate legal entity. It protects the assets of the shareholders. Another advantage is that this structure allows for growth by giving you the option to sell new shares in the business, as well as distribute profits to your shareholders.

When you set up a private company, you have to register with ASIC to obtain a certificate of registration and an Australian Company Number (ACN). You will also have to put together a company register which includes:

  • A constitution;
  • Share certificates; and
  • Director and secretary consent forms

Key Takeaways

There are many different types of legal structures to choose from when formally incorporating a sports group. What club structure you choose will depend on whether you want to distribute profits, where you plan to operate and what financial resources you have. Are you looking to establish a formal club structure? Contact our business lawyers on 1300 544 755 for assistance or fill out the form on this page.

Webinars

Redundancies and Restructuring: Understanding Your Employer Obligations

Thursday 7 July | 11:00 - 11:45am

Online
If you plan on making a role redundant, it is crucial that you understand your employer obligations. Our free webinar will explain.
Register Now

How to Sponsor Foreign Workers For Your Tech Business

Wednesday 13 July | 11:00 - 11:45am

Online
Need web3 talent for your tech business? Consider sponsoring workers from overseas. Join our free webinar to learn more.
Register Now

Advertising 101: Social Media, Influencers and the Law

Thursday 21 July | 11:00 - 11:45am

Online
Learn how to promote your business on social media without breaking the law. Register for our free webinar today.
Register Now

Structuring for Certainty in Uncertain Times

Tuesday 26 July | 12:00 - 12:45pm

Online
Learn how to structure to weather storm and ensure you can take advantage of the “green shoots” opportunities arising on the other side of a recession.
Register Now

Playing for the Prize: How to Run Trade Promotions

Thursday 28 July | 11:00 - 11:45am

Online
Running a promotion with a prize? Your business has specific trade promotion obligations. Join our free webinar to learn more.
Register Now

Web3 Essentials: Understanding SAFT Agreements

Tuesday 2 August | 11:00 - 11:45am

Online
Learn how SAFT Agreements can help your Web3 business when raising capital. Register today for our free webinar.
Register Now

Understanding Your Annual Franchise Update Obligations

Wednesday 3 August | 11:00 - 11:45am

Online
Franchisors must meet annual reporting obligations each October. Understand your legal requirements by registering for our free webinar today.
Register Now

Legal Essentials for Product Manufacturers

Thursday 11 August | 11:00 - 11:45am

Online
As a product manufacturer, do you know your legal obligations if there is a product recall? Join our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards