Community Interest Company

The item in the October Herald on changing the Club to a Community Interest Company (CIC) has prompted questions from several members.  This is great, as it is a significant change for the Club and we want to make sure that members are happy with where we’re going.  This e-mail provides more information on why we’re proposing this change and what the next steps are.

We have previously discussed the benefits from changing the club into a limited company.  Progress on this has been slow, as STW wanted us to take out a new lease.  As our current lease runs to 2026, we were reluctant to do this.  With help from the RYA, we have now persuaded our new Landlords (National Trust) that this is not necessary and that the change can be managed through a relatively simple “Deed of Assignment”.  The Committee have therefore agreed that we will push on with this change and we will be bringing this proposal to the AGM for Club approval.

After a lot of work looking at the various options, we have concluded that the right organisation for the club is a CIC, limited by guarantee.  This means that no shares are issued, but all full members guarantee a maximum amount of (probably) £1 in the event of the club being wound up.  At the moment there is no limit on member’s liability, and this is one of the reasons that we are proposing this change.  Should we have a serious incident, or dispute, at the club where someone sues us for damages, and if our insurance didn’t cover us, then Club members could be personally liable for substantial sums of money.  We hope that this is a very unlikely situation, but as the consequences could be so significant it is worth organising the club so that the possibility is avoided.

A particular advantage of a CIC is that it is asset locked, so in the event that the club is wound up, the assets can only be given to other similar CICs or charities, not returned to members.  This protects the club from members voting to close it to share the assets (hopefully a very remote possibility, but worth preventing!) and will make it easier to apply for grants, as these can clearly only be used to benefit the club.

The other advantage of becoming a CIC is that the club itself can enter into agreements.  The most important one is the lease, which is currently held in the names of three people, only one of whom is still a club member.  The CIC itself can sign agreements and this will help with other agreements we have with suppliers and third party organisations.  This, and the limitation of liability, is why the RYA recommend that clubs with assets and/or leasehold property consider moving to become a company.

We are working through the documentation associated with becoming a CIC, and intend to circulate the documents ahead of the AGM.  We will try to make as few changes as possible to the way the club operates (e.g. membership types, committee organisation; rules, etc.).  The main difference will be that a number of Committee members will also become Directors, but in line with our ethos as a volunteer run club, these will not be paid positions.  Assuming the AGM approves the change, we will set up the new CIC early in 2023.  Once we have  formal approval from the National Trust we will hold an EGM to formally transfer SHSC assets and members over to the CIC.  We are planning to have the change complete by the middle of 2023.

At the AGM on Monday 5th December we will request formal approval of this change.  Ahead of this we will have a meeting in the clubhouse on Sunday 27th November.  Here we will present details on the proposal to move to a CIC and will be happy to answer any questions that members may have about the change.  If you can’t attend this meeting, or have any burning questions, please feel free to send them to me at nick.waters@shsc.org.uk.