Legal advice for general meetings (unincorporated associations)

This advice is from the National Golf Clubs’ Advisory Association (NGCAA).

Having previously published material on the conduct of general meetings for golf clubs holding limited company status, we now turn to look at AGMs in unincorporated associations.

Those golf clubs that are not limited companies will generally fall into one of two other sub-categories in terms of the legal vehicle under which they operate. Normally, they are either a ‘registered society’ or an unincorporated association.

Registered societies

A registered society is either a co-operative society or community benefit society (previously known as industrial and provident societies), but which does hold limited liability and has its own corporate identity. Those organisations are governed by the Co-operative and Community Benefit Societies Act 2014 and they are registered and administered by the Financial Conduct Authority (FCA) rather than being subject to the Companies Act 2006.

The registered society must have governing rules that must be approved by the FCA. The rules, among other things, must contain the detail for the method of holding meetings, voting, the appointment of committees and officers, the removal of officers, how the accounts are to be audited and how to make changes to the rules. The rules for a registered society are its constitution and are, essentially, a contract between the members of the registered society.

Unincorporated associations

A golf club which is an unincorporated association has much more scope in relation to its constitution and how to conduct general meetings; in particular, it does not have to conform to the strictures of the Companies Act 2006.

An unincorporated association will have its method of holding general meetings governed by its constitution. That constitution may be made up of a rules document and / or bylaws, as well as other documents, perhaps, such as policies and procedures. Each one at each club is likely to vary as to the title and content.

Among other things, a golf club constitution for an unincorporated association would normally cover the following matters:

• How members are admitted

• Member subscription fees – when and how they are to be paid and by whom the level of those fees is set

• The authority and operation of management committees

• How existing members may resign or be expelled, including member discipline procedure

• Holding members meetings

• Amending the rules of the club.

There is no body of legislation that sets a legal framework for unincorporated associations. The constitution will lay out the manner in which the members have contracted with one another, but otherwise the unincorporated association will be subject to common law rules (previous case law) rather than any specific piece of legislation. Note, though, that there are pieces of legislation that will apply to unincorporated association golf clubs, such as licensing laws applicable to the serving of alcohol or the Equality Act 2010 which will prevent the terms of admission of new members from being discriminatory on the grounds of the protected characteristics within that act.

If any dispute arises in relation to the rules of the unincorporated association, the courts will examine and interpret the rules as a matter of law. A court would apply the rules of the unincorporated association in accordance with the principles of natural justice.

Some important points to consider for the conduct of general meetings within unincorporated associations are set out below:

• Ensure that the constitution sets out a procedure for nomination of officers in sufficient time for those nominations to be sent out with the notice of the general meeting.

• Consider whether the notice period for the general meeting is to be 14 days or longer, such as 21 or 28 days. Very often, the notice provisions will tie in with what the content of the meeting might be, such as 14 days if it is to deal with standard general meeting business, but 21 days in the event that a change to the constitution is proposed.

• It is also common for the constitution to require that the notice sets out full detail of the meeting, such as the time, place and date, as well as detail of the resolutions proposed and other agenda items for that meeting.

• It is also sensible to set out the required majority for the passing of resolutions. Some distinction ought to be drawn between the ‘ordinary’ type of resolution such as the election of officers where a 50 percent majority would be the norm, as opposed to making changes to the constitutional document itself, where a two-thirds or three-quarters majority is more common.

• It is also sensible to set out voting rights, such as if certain categories of membership will be excluded from voting rights, as well as receipt of the meeting notice and associated paperwork.

• Proxy voting is not a legal requirement for unincorporated associations, whilst it is for limited companies. Many unincorporated clubs have moved to include provisions for proxy voting notwithstanding this, to assist with member participation and being able to achieve the necessary quorum.

• Any general meeting should have the necessary quorum, so thought should be given within the constitution to the level of that, and the inclusion of proxies as above.

• Sometimes a general meeting might be called by the members requisitioning the same, rather than the ‘usual’ general meeting being called by the committee. Careful thought should be given to the required percentage of members who are required to sign a requisition to require the committee to call a general meeting. Allied to that, the constitution should give careful direction as to the powers of the committee to be able to manage the club. It is common for the members to be restricted to have powers only in relation to the election and removal of officers and for making changes to the constitution. In that example, the committee would have full powers to manage the club, such that if a member’s requisition sought to interfere with the management of the club by the committee, that the requisition could be rejected.

• The method of voting, in addition to the point on proxy voting above, should be set out within the constitution. For example, being clear that the quorum and the calculation of the majority on a resolution will be taken from those members present and voting in person and by proxy. Being clear that positive and negative voting will take place and can help avoid disputes between members, as well as setting out the system of voting, such as ‘first past the post’.

• Similar to the limited company constitution, it may be sensible to deal with whether matters are to be voted upon by a show of hands or by poll and in what circumstances members or the chairman can require voting to be conducted by a poll.

For more advice on your club’s general meetings or any other legal matter affecting you club, please contact Alistair Smith, CEO of the NGCAA, on office@ngcaa.co.uk or 01886812943