Is it possible to get a standard UK form of club rules and membership application?Are there UK laws relating to clubs? if so where can they be found?Does any UK law cover the requesting of a fee to provide membership facilities ormore particularly having a share in the assets of a club by virtue of membership?Does any law restrict the public offer or promotion of a membership of a club or participation in a clubs facilities or assets, and if so what are the restrictions if any?
System of Law: England-and-Wales
nothing to date
Thank you for your question. i am afraid the questions you are asking are really far to wide and generic to be answered sensibly. Can you try and be a bit more specific. There are for example two types of clubs - members clubs which are owned and run by remembers and proprietary clubs where a commercial organisation runs the club for profit and the members have no ownership rights. If you can provide a little more information about the nature of the club I may be able to assist you.
We have registered a domain name Voucherwinwin to enable membership by the public to receive online discount deals from retailers by use of our service. At this point it is not a club and so we need to know if we can just call it that, or if we need form a formalised club, and if so what type, and how to go about it?
Voucherwiwin is owned by Prize Mobile Ltd, a UK company. It is intended that on payment of a membership that our initial members will, in addition to the discount benefits, receive one free share each in the company. i.e.that a member becomes a shareholder.
We need know if this offer (involving payment) can be promoted legally under club rules as part of the overall discount benefits, and if not whether, if there was no membership payment, whether the free share offer promotion would fall under any rules either of club membership or corporate law? Members could be expected to benefit from any revenue of Prize Mobile Ltd and any sale of it.
Thanks . This is not a straightforward question. Essentially any promotion of shares in a company is regulated and can only be done if it is exempt under the regulations made under the Financial Services and Markets Act or if it is approved by an FSA regulated firm. There are exemptions for industrial and provident societies who operate similar schemes to yours but I cannot see any exemption or the scheme you propose. If you give the shares away you might argue that it is not an investment but to be honest I think the distinction is artificial as presumably members have to buy something in order to get the share. What some companies have done in the past is to give points which they promise will be converted to equity at a discount if a t a later date the company is floated and you may be able to get away with such a scheme. Senior Partner41069.5309167014
thanks this is very useful. appertaining to this:
a) what type of club is best for voucherwinwin to make its discount membership offer?
b) does vww need be a club and if not what sort of entity should it best be, or might be,
b) and if prize mobile was NOT the owner of vww would it make any difference if vww
offered Prize mobile shares for free or otherwise?
c) re your last para if the points issued were converted to shares within say a few
days or weeks given some form of ability to trade its shares (say on gxg) would
this likely be ok as you suggest?
d) Supposing these shares were issued following
i) no membership payment
ii) some small membership payment i.e.£3 and
iii) that in either i) or ii) above some short time later Prize Mobile
wrote to them as shareholders or the comany register proposing a rights issue
subscription to raise funds, what laws would it be subject to (apart from
the normal protection of all shareholders in a rights issue) ?
e) lastly supposing the owner of vww was a company outside the UK and Europe
but its directors were English, what jurisdiction may the English courts have?
A) it is not really a club it is just a commercial organisation and so called membership Canberra regulated by its terms of trade.B) it should be a limited liability entity if it is trading commercially. C) absolutely not , you would have to issue a prospectus properly authorised. Or listing particulars. you would have to do this any time whther you convert in 2 days or 2 years. D) once customers are members then you may be able to make rights issues but you will still have to do a circular signed off by the directors. However you cannot issue share initially to the public without the appropriate documentation. E) it does not matter if the organistaton is based outside the uk if makes offers here. You would need to keep everything overseas and probably have no place of business here.The botXXXXX XXXXXne is that what you are trying to do is incentivise customers by giving them a share of the action.There is nothing improper or illegal about this but you have to document it correctly and have the right authorised entities.If your objective is to raise money you might be better to use crowd funding or something similar which uses a device to get round the restrictions on public offers. ( one I don't actually think works but has had some success to date).
30 years experience in business law and related topics such as employment law
Your answers have been extremely useful. thank you.
one very last question can you give me an indication as to how to go about/find crowd funding?
We are looking for funding for what should be a very profitable business and we already have the software in place. what is needed is marketing funding and taking on a small staff of about £300k. Is crowd funding likely to be suitable for this?
Quite possible - Look up www.crowdcube.comThey are the market leaders on equity funding at the moment
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