The management committee reviewed the constitution and structure of the club and decided that it would be prudent and in the best interests of the members as a whole to incorporate a new company to be called Old Loughtonians Services Limited ("Services") and to transfer certain of the activities and assets of the club to Services.

Old Loughtonians Hockey Club Limited (the "Company") is a company limited by guarantee. It has no shareholders. Members of the club are members of the Company and agree to guarantee the liabilities of the Company up to the sum of £1.00. In 2017 the Company took over the assets and liabilities of Old Loughtonians Hockey Club which was an unincorporated association. It also applied to become a Community Amateur Sports Club (“CASC”). The regulations relating to a CASC are complicated but the Company succeeded in its application.

Since 2017 it became apparent that as the club grew the Company might, in the future, no longer be able to meet all of the core tests which include limits on:

(a) property related income (which the Company earns from the hire of its pitches and the clubhouse); and

(b) non property related income from non members including the very generous support from our then main sponsor Higgins Group plc.

The management committee reviewed the CASC requirements and the HMRC guidance indicated that in order to continue to comply the Company could set up a wholly owned subsidiary which would then take over the running of the commercial activities which the club has in place for the benefit of its members.

Why is this so important?

In 2011, the club installed the two Olympic standard pitches and floodlights which we are so lucky to be able to use. These will however not last forever and the club development plan includes proposals for repairs and eventual replacements. This will of course be very expensive and we need to plan ahead. We also plan to improve the clubhouse itself as presented on the website. Our fundraising campaign will be starting soon as well as new sponsorship opportunities. As a CASC the Company will be able to benefit from Gift Aid in the same way as a charity. It is therefore very important that the Company retains its CASC status.

What do we have to do to achieve this?

The first step was to incorporate Services. Services was incorporated as a private company limited by shares on 21 December 2020. Your president, chairman and welfare officer (the directors of the Company) also agreed to act as the initial directors of Services and the Company owns the only issued share. Services is a wholly owned subsidiary of the Company.

The next step was to transfer the non hockey playing related assets of the club to Services and for Services to accept the liabilities of the Company and to take an assignment of any contracts in place between the Company and third parties. Some contracts had to be novated. All employees of the club automatically became employees of Services (under the TUPE regulations) and their contracts were protected and they were treated as if they had always been employees of Services.

Practical steps

To achieve this there needed to be:

(a) a form of transfer agreement between the Company and Services;

(b) an underlease between the Company and Services to enable Services to administer the property contracts;

(d) various other deeds reregistering certain assets in the Company.

We also of course needed to amend insurances and things such as statutory and contractual licences.

Documentation

The Company has articles of association which are the constitution of the Company. These will not change. Services (as a wholly owned subsidiary) was initially set up with the Model Articles as its constitution. Those articles were subsequently amended to tie in with the articles of the Company.

A hive down agreement was prepared to deal with the transfer of the relevant assets and business to Services as were notices to third parties dealing with the assignment of contracts.

Frequently asked questions

These are some of the questions which the management committee considered and took advice on at the time.

What are the benefits to members?

CASC status provides important benefits as described above. The income threshholds for compliance have not increased for many years and the club’s income is creeping up. The club is trying to earn as much income as it can to support the development of the club and CASC advantages support this.

What do other clubs do?

We do not know what all other clubs have done but we have taken advice from a body which specialises in advising on CASC status and they have confirmed that the right route is to follow the HMRC advice.

What are the tax implications?

As a CASC the Company is exempt from corporation tax and can benefit from Gift Aid. Having CASC status could be very helpful in our fundraising efforts. Without CASC status the Company would have to pay corporation tax on any profit. Services will be subject to corporation tax but if it makes a profit it will be able to make a gift of that profit to the Company at the end of the year and we are advised that the Company would not pay tax on that.

What will Services actually do?

Services will have the benefit of an underlease of the pitches and clubhouse. It will take over the contracts with the nursery, club shop and Vodaphone as well as day to day pitch and hall hire. In return for managing everything it will retain the property income. As it is a wholly owned subsidiary it can later declare a dividend (or make a gift) in favour of the Company in respect of any profit earned. It will also take on the day to day administration including running the club office, maintaining the pitches and grounds, organising tournaments and camps as well as catering and the bar leaving the Company free to concentrate on playing hockey.

Under the terms of the underlease the Company and its members will continue to have the right to use the facilities whenever they need them.

Administration

We now have separate accounts and meetings for Services and the Company and there will be slightly more administration. However, as a CASC the Company already has to account separately for member income and non member income so in practice there will be little change in the recording and reporting processes.

What does this mean for me?

Hardly anything in practice when it comes to playing hockey. It will however potentially help all of us as members in our aim to improve and replace our clubhouse and pitches.

Who will run Services?

Services is a wholly owned subsidiary of the Company. The same management committee will act on behalf of the Company and Services. Representatives of the Company board or management committee (currently the president, chairman and welfare officer) form the board of directors of Services and the Company company secretary is also the Services company secretary.

The officers have statutory duties under the Companies Acts which they will need to comply with but in practice the day to day activities of Services will still be carried out by the employees of the club and the club as a whole will still be run by the management committee. All of the captains, managers, coaches and other volunteers and officers will all continue to carry out the same roles as before on behalf of the members as a whole.

Will this cost a lot of money to implement?

No. Fortunately members of the committee have volunteered to assist with the legal documentation without charge. The fee payable to Companies House to incorporate Services was £12 and there will be an annual filing fee of £13 to cover Services’ confirmation statement (what used to be called the annual return).

What if I have more questions or concerns?

Please send any questions or concerns to the club through the Contact Us facility on the website as usual and we will either send out a further note to cover questions raised or address them at the general meeting itself.

The management committee seems to be very active and communicative at the moment and we seem to have a very positive atmosphere in the club. Is there anything I can do to help?

Yes please. We are always looking for more volunteers to help make this the best club in the country on and off the field. Please do let us know if you would like to help whether with recruitment, sponsorship, coaching, marketing or otherwise.