Entity to be registered: clubs and associations: independence of sections, branches, sub-clubs and committees - definition of independence
For a subsidiary entity to be able to be considered to be independent from the parent organisation, it must be able to show that it is both constitutionally and financially independent from that organisation.
An entity may be considered to be constitutionally independent from its parent organisation if it:
- is responsible for its own membership (that is, a person doesn’t have to be a member of the parent organisation to be a member of the subsidiary entity) and charges its own membership subscription
- has its own liquor and gaming licences
- is responsible for its own rules and constitution
- can make its own day-to-day decisions without referral to, or approval from, the parent organisation
- has its own ruling committee which is elected by the membership of the subsidiary entity only.
The fact that a subsidiary entity may be affiliated to the parent organisation does not necessarily mean that it is constitutionally dependent on that parent organisation.
An entity may be said to be financially independent of its parent organisation if it
- is allowed to keep, for its own purposes, any profits or surpluses that it makes
- is legally responsible for its own debts
- maintains its own records and accounts and its own bank account
- issues invoices and makes purchases in its own name
- holds title to any equipment that it may use in the course and furtherance of its activities
- pays its own overheads (for example, heating and lighting) and hires and pays its own staff.
The fact that a subsidiary entity might receive grants from, or submit audited accounts to, its parent organisation does not, of itself, mean that it is financially dependent on that organisation.
The question of whether a sub-club was financially and constitutionally dependent on another club to which it was clearly related was addressed in the Tribunal decision in the case of A G Hayhoe (for Watchet Bowling Club and Watchet Indoor Bowling Club), LON/80/341, January 1981 (1026).