Clubs and Associations defined 

A club is a group of people acting together for a common social purpose. Once that group acquires property or assets, or agrees to buy goods or services, then legal rights and liabilities will arise between the members.

The members of any Club which intends to own property or enter into dealings with third parties should consider formalising the relationship among themselves by agreeing a constitution or set of club rules (the words in this context are interchangeable).

The founding members of new clubs are free to establish their own terms for the constitution but are advised to consider using the wording (or at least the headings) of the RYA model constitution. A club which has a bar for the supply of alcohol to its members is required by the Licensing Act 2003 to have a written constitution, with a number of specific provisions, in order to register the bar facility under the Act.

Constitution and Legal Identity:

A club which has adopted a constitution but has not become a registered company is known as an unincorporated association. The constitution will be the club's governing document and forms a contract between each and every member. The legal identity of the club is the legal identity of each and every member of the club together.

A club will be recognised as an unincorporated association even where a constitution has not been adopted providing that the club is formed,

• for an agreed lawful purpose for the benefit of themselves and others;
• for a purpose which will not make a profit for themselves;
• with the intention of creating a legal relationship among themselves.

An unincorporated association which has a constitution is referred to as constituted; if not, it is referred to as unconstituted.

Financial Liability:

If the club cannot meet its financial obligations or gets into legal trouble, the members individually responsible for taking on that liability (eg the relevant commitee members) in theory can have unlimited personal liability.  However, provided the club is properly insured, and the committee acts responsibly and with financial prudence, this unlimited liability is unlikely to be of any practical significance.

Members will be personally liable for their personal actions within the club. Should a member sign a contractual document with a third party on behalf of the club then, in the event of a problem arising the third party will be entitled to take legal action against the signatory rather than the club.

One of the advantages of remaining unincorporated is the absence of external accountability (other than to the tax authorities where relevant) and only the members need to know the financial state of the club.

If you require further assistance please do not hesitate to contact the Legal Team Tel:  0844 5569519  Email: legal@rya.org.uk.