In the vibrant world of the golfing community, the choice of governance structure for not-for-profit organisations is a crucial decision that sets the stage for effective operations and legal protection.
Queensland and Northern Territory golf clubs primarily opt for either Incorporated Associations (IA) or Companies Limited by Guarantee (CLG) as their governance structures. In this article, CPR Group explores the characteristics of these two structures and their implications for golf clubs across the states.
Understanding Governance Structures
Governance structures serve as the backbone of not-for-profit organisations, ensuring legal compliance, accountability and providing members with a level of protection.
Your club may have the perfect set up for your circumstances or you may think there is a more suitable structure. This article identifies some key considerations, but we highly recommend seeking expert advice before pursuing any structural changes.
What structure is best for your golf club?
Incorporated Associations are the most prevalent choice among not-for-profit organisations in Queensland, boasting over 30,000 such entities across various sectors. This structure is favored for its simplicity and ease of implementation, making it an attractive option for community-driven organisations like golf clubs.
One of the key advantages of choosing IA is the establishment of a legal entity separate from its members. This separation provides members with a certain level of legal protection, ensuring that individual members are not personally liable for the organisation's debts or legal obligations. Therefore, for golf clubs seeking a straightforward and accessible governance structure, an Incorporated Association may be the ideal choice.
For golf clubs desiring more flexibility in membership, the ability to trade interstate, and a board-driven structure, a Company Limited by Guarantee offers an alternative governance model. This structure is particularly suitable for larger clubs with broader scopes and ambitions.
CLGs are characterised by a guarantee from their members to contribute a nominal amount in the event of winding up the company, often just $1. This structure allows for a more robust framework, suitable for golf clubs with interstate activities, commercial interests, or those with a desire for a more corporate governance style. This includes the ability for some board directors to be appointed, not elected by the members, allowing people with desirable skills to be brought onto the board.
The decision between an Incorporated Association and a Company Limited by Guarantee should be made based on the specific needs, goals, and activities of the golf club. Considerations such as membership flexibility, trading across borders, and the desired level of corporate governance should guide this decision-making process.
Golf clubs operating on a community-centric model, with a focus on simplicity and accessibility, may find that an Incorporated Association aligns seamlessly with their objectives. On the other hand, golf clubs with a more expansive vision, involving significant financial turnover and a corporate governance approach, may discover that a Company Limited by Guarantee better suits their needs.
| What type of organisations choose to be Incorporated Associations? | What type of organisations choose to be Companies Limited by Guarantee? |
|---|---|
| • Clubs that prefer to be member-driven | • Larger organisations with multiple facets (e.g., a golf club with a property portfolio) |
| • Only trade in QLD or NT | • Clubs with significant income and assets |
| • Small to medium sized organisations | • Require more flexibility for board structure (e.g., skills based, board appointments) |
| • Need to trade interstate |
Conclusion
In conclusion, the choice of governance structure is a pivotal decision for golf clubs, shaping their legal standing, operational framework and member protection. Whether opting for the widely-used Incorporated Association or the more versatile Company Limited by Guarantee, each structure comes with its unique set of advantages.
By carefully assessing the specific requirements and ambitions of the golf club, stakeholders can make an informed decision that lays the foundation for a successful and well-governed organisation in the dynamic world of golf. The process to change is actually quite simple, but ensuring a change is right for your club needs careful consideration.
CPR Group is Golf Australia’s Preferred Provider for governance support. With over 26 years of working alongside management committees and board members, their team is highly skilled and experienced to assist with all aspects of governance, including workshops to determine the best structure for your golf club.
For more information contact CPR Group on:
P: 1800 100 204
