In this website, I often refer to the fact that the Lincoln and District Indoor Bowling Club Co Ltd (LIBC) is a CASC registered club. The Community Amateur Sports Club (CASC) scheme was introduced in 2002 as an option for clubs to register with HMRC  (the tax man) and receive tax reliefs in return for the club committing to always comply with a set of regulations. LIBC joined in 2004. More - click here.

BACKGROUND of Community Amateur Sports Club (CASC) non-compliance. In Sep 2021 I reported to the BofD a serious error in their LIBC governance. It had started in 2004 when they registered the LIBC as a CASC, which is very much about members' rights, and the fault was that they were denying members those rights:

 

  • HMRC states that, to register as a CASC, they "require detailed evidence to show a club is run as a members’ club". 

  • HMRC also states that a Members Club is “one where ownership of the club and its assets rests with the general membership who control the club and its dealings. Such control may be exercised through an elected committee

  • But in the case of a company limited by shares, such as the LIBC, Company Law demands that the company Board of Directors (BofD) control the club, therefore the "elected committee” would have to be the BofD .

 

   Compliance requires:

  • In a company limited by share, shareholders nominate and elect the BofD, therefore all members of the club must be shareholders -

  • And the BofD has to be an "elected committee” -

  • And it can only be an "elected committee" if all of the directors are elected by the members. The clue is in the word "elected"!  

But between 2004 and 2022:

  • Only 50 of the approx.1000 members were shareholders

  • Only these 50 shareholders were allowed to attend and vote at company meetings so only these 50 shareholders were involved in choosing and electing directors.

  • The directors chose the shareholders.

  • Therefore, the BofD controlled who could become a director!

  • The whole process was totally, utterly, NOT CASC compliant.

 

Non-shareholder members were “allowed” to attend the Management Committee's annual meeting (totally separate to, and not to be confused with, the shareholders' company Annual General Meeting) to voice their concerns. They were “allowed” to nominate 6 of the 13 Management Committee members. The remaining 7 were directors as appointed by the directors, do the maths! Only bowling subjects were allowed, not company matters of any kind. We were told that "Company business" could not be discussed.

Our accountants for that period (2004 to 2021 incl), Streets, were asked their opinion about whether or not LIBC had been compliant during that period and supplied a statement. I asked for a copy but never received one. The Company Secretary of the time did, however, read it out to me and I took notes. As best as I can remember, referring to my notes, it said words to the effect of:

  • “the company’s Articles of Association (copy attached) includes a Clause (Clause 13) which states that ‘Each Member shall have one vote only whether on a show of hands or on a poll irrespective of the number of shares held by them’. This clause effectively overrides what would be considered as the traditional voting rights for a limited company (i.e. based on shares held).......
    • (NOTE: This means that, in the opinion of our accountants, our Articles of 2004 were CASC compliant because they allowed all members to attend and vote at company meetings regardless of whether they were shareholders or not. The articles must have been compliant because they were accepted by HMRC for the club’s initial application to join the scheme)
  • ......and on the assumption that in practice the ‘one vote per member’ policy is observed, my view is that the company is not at odds with the requirements/guidance for CASC status in that regard.
    • (NOTE: In other words, if ALL members of the club HAD been ALLOWED full voting rights as the Articles of 2004 instructed, we would have been CASC compliant. But the BofD didn't obey their articles, and only allowed the 50 shareholders to have full voting rights. So we weren't CASC compliant.)
  • (STREETS statement shown in red) (my comments in blue)

 

I had been one of the 50 shareholders from 2013 but did not spot this error until Aug 2021. I immediately alerted the directors (1 Sep 2021, to view - click here). After some"discussion" they finally admitted their error and from 1 Jan 2022 onwards, always invited all members to attend and vote at company general meetings. They issued a share to every one of the approx. 1000 members and whenever someone joins the club they purchase a share.

 

But this reluctance to allow members their full voting rights continues and many of my complaints to the BofD since then have been related to members rights, as can be seen on Errors webpage - click here.

To see some useful background information related to the subjects discussed on this website -  click here.