The Sports Governance Principles released by the Australian Sports Commission (ASC) in March 2012 and reiterated in the ASC’s High Performance Strategy, Australia’s Winning Edge, released in November 2012, outlined the ASC’s best practice for the corporate governance of sports in Australia.  Principle 1.2 states that a national sporting organisation (NSO) should be incorporated as a company limited by guarantee under the Corporations Act 2001 (Cth) (Corporations Act).  Additionally, for ASC large partner NSOs, it is a mandatory requirement of the ASC that the NSO is established as a company limited by guarantee.

Why should your sporting club be a company limited by guarantee?

Sporting clubs may be incorporated as associations under the applicable legislation in the relevant State.  Whilst this State based legislation contains corporate governance requirements, they are not as comprehensive as those set out in the Corporations Act. 

Being registered as a company limited by guarantee also allows the organisation to carry on a business in another State or Territory.

How does a sporting club become a company limited by guarantee?

If a sporting club is an incorporated association in Western Australia under the Associations Incorporation Act 1987 (WA) (Associations Act), it can apply for registration as a company under the Corporations Act pursuant to amendments made to the Associations Act in 2010. 

There are a number of key steps to be taken and approvals to be obtained to enable transfer of an incorporated association to a company.