How to choose a structure for your grassroots football club in England

At a glance

This is a summary of what the official guidance says about each structure, set out side by side. It is not a ranking or a substitute for checking the governing documents and the current filing rules. The sections below give the detail and the sources. CASC is not in the table because it is an HMRC registration a club makes on top of its structure, not a structure itself.

A charity can also be a charitable company, which registers with Companies House as well as the Charity Commission, or an unincorporated charity, whose trustees are personally liable. Directors of any company still have legal duties, and limited liability does not cover a personal guarantee a director signs. The sections below explain both.

The structures

Unincorporated association

GOV.UK’s guidance on unincorporated associations (opens in a new tab) gives a sports club as an example: a group of people who agree to come together for a reason other than making a profit. It says you do not need to register one. It also says individual members are personally responsible for any debts and contractual obligations, and that if the association makes a profit, for example from trading, it pays Corporation Tax.

Limited company

GOV.UK says a limited company (opens in a new tab) is legally separate from the people who own it, and that owners’ responsibility for its debts is limited. Companies register at Companies House. GOV.UK’s page on limited company types (opens in a new tab) describes two kinds:

• Limited by shares: owned by shareholders, whose liability is limited to the amount they invested, and which pays profits to shareholders through dividends.
• Limited by guarantee: owned by guarantors, who agree to pay an amount they have guaranteed if the company cannot pay its debts. It invests its profits back into the business instead of paying them to its owners.

Nothing we found requires a football club to take either form. Limited liability has limits too. GOV.UK’s guidance on personal guarantees (opens in a new tab) says a personal guarantee is a legally binding agreement that a director will personally repay a debt, that lenders, landlords and suppliers ask for them, and that giving one could expose the director’s personal assets. Directors also have legal duties, including keeping records and filing accounts. HMRC says the CASC scheme is not suitable for proprietary clubs and businesses, as the CASC section below explains.

Community interest company (CIC)

The CIC Regulator’s guidance (opens in a new tab) says CICs are limited companies that operate to provide a benefit to the community they serve. A CIC must satisfy the Regulator that a reasonable person might consider its activities benefit the community, and must keep meeting that test. Every CIC has an asset lock, which the Regulator describes as a legal clause that prevents the company’s assets being used for private gain, and which cannot be removed. The guidance also says that once a company is a CIC it cannot become an ordinary company, and that a CIC limited by shares can pay dividends to shareholders, subject to a cap. A CIC files an annual CIC report with its accounts, showing it still meets the community interest test. A CIC is not a charity. The guidance says a CIC can leave the regime by converting to a charity or a charitable incorporated organisation.

Charity

The Charity Commission’s guidance What makes a charity (opens in a new tab) lists the advancement of amateur sport as a charitable purpose. That does not make every football club eligible. A charity must have charitable purposes only, and those purposes must be for the public benefit. That means benefiting the public or a sufficient section of it, with no more than incidental personal benefit.

A charity can take different forms. The Commission’s guide to charity structures (opens in a new tab) says that in a corporate structure, such as a charitable incorporated organisation (CIO) or a charitable company, trustees are generally not personally liable for what the charity does, while in an unincorporated charity they are. It also says whether you must register depends on the structure and on the charity’s income, and that every CIO must register.

A CIO is a corporate form that only a charity can take. It comes into existence when the Charity Commission registers it, and it must send its accounts and an annual return to the Commission every year, whatever its income. A charitable company registers with both Companies House and the Commission. A CIO is a charity; a CIC is not.

Community amateur sports club (CASC)

A CASC is a registration with HMRC, not a legal structure. GOV.UK’s CASC pages (opens in a new tab) say registration can give tax relief on some income, gains and profits, Gift Aid on donations and business rates relief, and that to benefit you must register with HMRC. HMRC’s eligibility page (opens in a new tab) says a club must:

• be based in the UK, provide facilities for eligible sports and encourage people to take part;
• be set up with a formal constitution, known as a governing document;
• be open to the whole community and have affordable membership fees;
• be organised on an amateur basis;
• be managed by fit and proper persons.

HMRC’s detailed guidance (opens in a new tab) adds that a CASC must be non-profit making, with any surplus reinvested in the club and no distribution of assets to members. If the club closes, its net assets must go to approved sporting or charitable purposes: the governing body of the sport, for use in community sport, another CASC or a charity. HMRC also says it would not be acceptable for a privately owned club or business to draw up rules to meet the non-profit requirement, and that the CASC scheme is not suitable for proprietary clubs and businesses. It also says a registered CASC cannot apply to be recognised as a charity: it would have to wind up and transfer its assets and activities to a new charity. If charity status is something your club might want later, ask your adviser about this before you register as a CASC. The guidance sets conditions for registration, including an income limit, and conditions on each relief, so read it, or ask your accountant, before you rely on any of them.

What The FA asks for

Your County FA handles affiliation and can tell you what it needs from a new club. Our guides to starting a grassroots football club and club committee roles cover the officers a club needs and the order of setting up.

If your club wants accreditation, The FA’s Club Portal accreditation checklist (opens in a new tab) lists Club Rules among The FA’s policies, and says a club can upload its own club rules instead.

We have not found a national FA rule that a club must take a particular legal structure. Ask your County FA whether it has requirements of its own.

Situations to talk through with an adviser

These are examples of decisions a committee faces. Each is a set of questions for an accountant or solicitor, not a recommendation.

• Renting a pitch. Who signs the let or lease, and who would be responsible if the club could not pay? For a lease over several years, does the landlord want a personal guarantee?
• Employing coaches. Who would be the employer, and who would be responsible for pay, tax and contracts?
• Applying for grants as a member-run club. Which structures does each funder accept, and would a change of structure affect a grant already given?
• A coaching business keeping its profits. HMRC says the CASC scheme is not suitable for proprietary businesses, and a charity must have charitable purposes only. What options fit a business that keeps its profits?
• Owning equipment. Who owns the goals, kit and other equipment now, and what happens to them if the club changes structure or closes?
• Signing contracts. Who can legally sign on the club’s behalf, and does that person carry the risk?

Questions to ask before you decide

Take these to an accountant or solicitor, and to your County FA where they relate to football:

1. Who would be personally responsible if the club could not pay a debt, such as a pitch let or a kit order?
2. Does the club employ anyone, sign leases or hold equipment, and who signs contracts now?
3. Will anyone take money out of the club as profit, or is every surplus reinvested?
4. Which tax reliefs would we qualify for under each option, and what are the conditions?
5. Which funders do we plan to apply to, and what structures do they accept?
6. Who would be the trustees or directors, and what would their duties be?
7. What would we have to file each year, and with whom?
8. If we change structure later, what happens to our assets, our affiliation and our contracts?

For funding, our guide to grassroots football funding and grants explains how to check what each funder will accept. Funders set their own eligibility rules.