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Proposed New Trust Rules

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Parent Category: 1874 Trust

Written by Margaret Nixon

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 Proposed Changes to the Trust Model Rules
The Trust Board are recommending that we change our Trust Rules – details regarding the proposed changes are given below. At the same time, we will be asking Trust members to vote to accept in principle the rules for running a football club, which consist of the same core rules, but with additional controls required by the Football Association, to permit us to have the appropriate governance and rules for running a football club, should we need to set up a 'phoenix' club.

Why do we need to change?
Our rules were set up in 2004 based on the model rules for an Industrial and Provident Society and the best guidance available at the time. As Supporters Direct (SD) has gained experience of working with Supporters Trusts throughout Football and latterly Rugby League, they have developed new model rules, in conjunction with Cobbetts Solicitors.

The changes are related to the clarification of our purpose, which is defined in Rule 3 – Community Benefit Purpose

The Society’s purpose is to be the vehicle through which a healthy, balanced and constructive relationship between the Club and its supporters and the communities it serves is encouraged and developed. The business of the Society is to be conducted for the benefit of the community served by the Club and not for the profit of its members.

All Trusts have been asked to revise their rules at their next AGM, however in our case, it is in our interest to revise the rules as soon as possible for three reasons:

1. to allow us to be registered as a Supporters Community Mutual, which will permit us to be able to quickly set up a community shares scheme.

2. to align our rules to a model suitable for running a football club, if required

3. to include an asset lock clause within our rules to safeguard any existing or future assets owned by the trust.

What do we need to change?
There are a number of changes in format, definitions, interpretation etc, but these do not change the rules significantly and these are not listed in this paper. A copy of the revised rules will be made available on the Trust Website, if you wish to look at all the changes.

Significant changes are listed below, the revised wording in the rules are shown in italics.

Rule 1 – Change of name
SD suggest that by changing the name to include Co-operative, we make it clearer that we are a community benefit society. The proposal is therefore to change from Northwich Victoria Supporters’ Association Limited to Northwich Victoria Supporters’ Co-operative Limited. There is no direct impact. This is purely our legal name and we would still be known as Northwich Victoria Supporters’ Trust.

Rule 4 - Revised Objectives:
The objects have been revised to better describe what we are here to achieve and are also written to support grant funding applications. The revision is defined below:

The Society’s objectives are to benefit the community by:

1. being the democratic and representative voice of the supporters of the Club and strengthening the bonds between the Club and the communities which it serves;

2. achieving the greatest possible supporter and community influence in the running and ownership of the Club;

3. promoting responsible and constructive community engagement by present and future members of the communities served by the Club and encouraging the Club to do the same;

4. operating democratically, fairly, sustainably, transparently and with financial responsibility and encouraging the Club to do the same;

5. being a positive, inclusive and representative organisation, open and accessible to all supporters of the Club regardless of their age, income, ethnicity, gender, disability, sexuality or religious or moral belief.

Rule 5 – Powers
In addition to the existing powers that the Trust has, the following is proposed:

In particular, in pursuit of these objects (but not otherwise) the Society may:

1. acquire an interest in or ownership of the Club;

2. secure democratic and accountable representation on the Club’s Board;

3. take any other steps in relation to the Club which enable it to exercise the greatest possible influence in the ownership, governance and management of the Club.

Rule 7 – Application of Surplus
This rule now allows the Trust to use surplus in paying interest on or repaying issued share capital in accordance with the provisions of these Rules.

(This will allow us to be able to pay interest on the Community Shares scheme, should sufficient surplus be generated)

Rule 8 – Asset Lock Option
This is a major change from the old rules. This is used where the Trust has an asset that needs to be locked to the Trust and not disposed. (Therefore, it is key if we are to obtain a share in or ownership of our own stadium). In order to make this change 50% of the Trust members must vote for it. (Either in person or by proxy). The main purpose of this rule is to protect a Club / Trust from asset strippers. There are rules relating to how the Trust can deal with its assets.

Once the asset lock is agreed for the rules, a second meeting is required where 75% of members who are in attendance at the meeting or have voted by proxy, need to agree to the change. (The inclusion of the asset lock is a significant thing and legally a second meeting is required to confirm the initial decision).

Once the Asset lock is included in our rules, we can not dispose of the asset. However, we can change the asset or transfer it to another community benefit society (should the Trust fold).

Rule 10 and 14 – Membership
This section has been tightened, the minimum age of a full member has been reduced to 16, due to changes in legislation. This also extends to membership of the Trust board.

Rule 18 and 21 – Shares
The Trust can now have two types of shares. The ordinary shares are as per the existing rules and cost £1 from the membership fee.

Capital Funding Share provisions are described in Rule 21. This rule allows the Trust to issue community shares to raise revenue for a community benefit capital raising project.

Capital Funding Share Provisions
In order to fund its business, the Society may issue Capital Funding Shares. Capital Funding Shares may be issued in such denomination and upon such terms as the Society Board shall decide, subject to the Rules, and in particular the following provisions:

1. Capital Funding Shares shall not be withdrawable except with the consent of the Society Board;

2. The Society Board may pay interest to holders of Capital Funding Shares as compensation for the use of such funds, but the rate of interest shall be no higher than the Society Board considers to be necessary to attract the funding needed for the business of the Society and shall not in any event be higher than 2% above clearing bank base rate from time to time. The rate may vary within these limits between different issues of shares;

3. No withdrawal of Capital Funding Shares or payment of interest on them shall be made except from trading surpluses and any withdrawal or payment shall be at the discretion of the Society Board having regard to the long term interests of the Society, the need to maintain prudent reserves and the Society’s primary commitment to community benefit;

4. Capital Funding Shares may only be issued to members;

5. On the solvent dissolution or winding up of the Society, holders of Capital Funding Shares shall have no financial entitlement beyond payment of outstanding interest and repayment of paid-up share capital.

Rule 23 – Removal of members
A member may be expelled for conduct prejudicial to the Trust in accordance with any Disciplinary Policy adopted by the Trust. (SD have provided a template for this policy)

Rules 28 – 48 – General Meetings and Annual General Meetings
These rules have been redrafted to make the requirements and conduct of General Meetings clear. SD have provided new Model Standing Orders for General Meetings to help us with governance of the Trust. The quorum required has been amended to try to avoid adjournments, a quorum is now 20 members or 5% of the members entitled to vote being present at the meeting, whichever is lower.

Rule 50 – Resolutions
The rules have been redrafted to assist with decision making. We will amend our existing decision making procedure accordingly.

Rule 57 and 69 – Constitution of the Board and Board Meetings
There was a suggestion from SD that we reduce the number of people that we could have on the Board, to make elections democratic and to ensure that Board meetings etc are effective. As a result, we have chosen to change the Board Membership to a maximum of 10 people. (It was 15)

SD has provided a template Board membership and conduct policy. We will amend our existing policy in line with the new template. The changes are made to help us manage the Trust, using best practice.

Rule 85 – Financial Audit
The Trust Board proposes that we change the financial year end to 30 June to align with the normal year end for a football club. This will result in the AGM being held at the beginning of the new season and will better align with the footballing calendar.

Rule 101 – Investment and Borrowing
This rule is a safeguard to prevent over borrowing by the Society Board.

What Next?
A special general meeting has been called for Thursday 29^th March 2012 at Lostock Club, start time 7.00pm. The proposal before the Trust members is to accept the rule changes, as outlined above. For people who can not attend please return a proxy voting form – a form is attached.

As explained above, it is critical that we obtain agreement from 50% of the members to include the asset lock to protect any future assets. This is particularly relevant if we are successful in arranging a community share scheme to raise money towards a new stadium.

The NVST specific statements are shown in the rules in blue text.

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