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People Power is the Goal for Football.

Date: 02/05/2016 | Corporate

These are trying times for all who love Scottish football.

At Premier League level, the quality is mediocre at best and often uninspiring – Scottish club results in recent European competitions provide evidence of that. Meanwhile, Scotland struggles to produce talents who can compete in the world’s top leagues and, more importantly, take the nation to the finals of major tournaments. At an international level, football is severely tainted by allegations of corruption and cronyism with the game becoming increasingly inaccessible to many fans.

Many believe there has been a void in people power to help drive forward the changes so badly needed within Scottish football with a fresh approach urgently required. Earlier this year, the Scottish Football Supporters Association (SFSA) was formally launched to help address this gap by creating an independent organisation representing its many supporters.

The aims of the SFSA are straightforward enough: to improve, reform and ultimately reclaim the game for supporters and communities. While few could argue with that, achieving this requires a unified voice from an organisation which is suitably structured to build confidence across the often tribal environment of Scottish football. As a law firm, we’ve been proud to work closely with the SFSA, providing it with pro bono support to ensure it is able to do just that.

A key starting point for this work was the decision to incorporate the organisation as a Community Interest Company (CIC).

Introduced by the UK government in 2005, CICs are limited liability companies designed for social enterprises with the specific aim of providing benefit to a community – in this case, the diverse community of football supporters throughout Scotland.

The primary purpose of a CIC is to use its income, assets and profits to benefit the community it is set up to serve rather than its members, directors or employees. There are currently around 12,000 of these organisations in the UK, all of which must file annual accounts and adhere to the principles of company law. There are, however, a number of legislative provisions in place to ensure CICs retain their focus on the community they are intended to serve.

Compared to registered charities, CICs can operate with less onerous regulation and a significantly lower level of administration. While they are governed by their own regulator, it tends to take a light touch approach with minimal interference except when specific complaints are made against such an organisation.

To qualify as a CIC, the key test for an organisation is whether a reasonable person might consider that the company’s activities are being carried out for the benefit of the community it is intended to serve, an obligation which it must continue to satisfy. There are also strict rules in place about CICs transferring profits and assets to ensure community benefit is always maintained.

CICs are relatively quick, easy and inexpensive to set up. Applying for CIC status is a fairly simple process, requiring completion of a form which outlines the organisation’s social purpose along with articles of association and other standard legal documentation being sent to Companies House with a modest fee. If the application is accepted by both Companies House and the CIC regulator, it is usually incorporated within 2-3 weeks from the date of application.

For a body like the SFSA, being incorporated as a CIC enables it to generate profits, as long as these profits are applied for the purpose of benefiting its overall aim of greater supporter engagement with Scottish football. The CIC structure also has the advantage of limited liability for the members who set it up.

The long-term survival of Scottish football clubs will only be assured through the support and participation of fans. By capturing their collective energy and ideas, the SFSA has been set up to help ensure a better future for the game. The CIC status of this organisation will be an important factor in enabling it to effectively harness that goodwill for the benefit of the game in Scotland.

This article first appeared in The Scotsman on 2nd May 2016.

The matter in this publication is based on our current understanding of the law.  The information provides only an overview of the law in force at the date hereof and has been produced for general information purposes only. Professional advice should always be sought before taking any action in reliance of the information. Accordingly, Davidson Chalmers LLP does not take any responsibility for losses incurred by any person through acting or failing to act on the basis of anything contained in this publication.

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