Hi Group, my social club is closing and the committee said that the 80k in the funds will be shared out equally between the members, even those members who have just joined will get the same money as those that have being paying their membership fees for 20+ years. They said that this is the law (UK). Is this true? Thanks in advance.
IANAL... probably depends on how the club was formulated legally. Are there any formal documents that cover this? Were a limited company to do this then the residual monies in the company would be shared out to shareholders in the proportion of their shares.
Thats what happened when the RAC (club) was privatised, all club members got around 35K iirc.
Not too sure there is necessarily a UK law on the matter. More likely it will depend on the club's constitution and/or rule book, which should hopefuly spell out what should happen in the case of a dissolution.
If you're unlucky, and it isn't spelled out, then prepare for problems. Whatever you do, you will upset someone. If they feel strongly about it you might have to fight a legal action and the committee will need to consider carefully how they prepare for that. It would probably be prudent to hold a proportion of the 80k back for a period in case the club has to contest a claim. I'd also suggest that a notice is circulated and posted to the effect that all claims should be submitted by a certain date, preferably before the share out, and certainly within a further three months. It might not be legally watertight and prevent a later claim, but would presumably be a strong argument in court.
Assuming membership is by subscription, how many current, fully paid up members are you talking about? Presumably you've frozen new applications in order to prevent carpet baggers.
I don't know when membership subs are due by, but what will you do about any members who have not yet paid by the due date, but who have been permitted to enjoy the benefits of the club. That could be construed as implied membership and might mean they too would be entitled to share in the divi. (subject to a deduction for unpaid subs).
Rgds
__ Richard Buttrey Grappenhall, Cheshire, UK __________________________
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