The Labour Party’s commitment to legislate for partial fan ownership published today by Clive Efford, Shadow Sport Minister, is admirable for its intent but worryingly short on detail says Mike Dyer, Director of Portsmouth law firm Verisona Law .
Dyer said that “there is a tendency to think of Football Clubs as being somehow different from any other business organisation.” In many respects, perhaps they are, but the underlying fact is that they are companies and as such bound by Company Law in the UK.
The proposals do not seem to address the fact that fundamental changes would be required to the Companies Act 2006 surrounding (in particular) Shareholder rights.
For example, the proposed right for a Supporters Trust to appoint and remove Directors whilst only being a 10% Shareholder represents a significant departure from the present legal position. As the law currently stands, a Shareholder with only 10% of issued shares would not have such a right unless there is a Shareholders Agreement in place (a document setting out various terms between Shareholders and regulating the voting rights on certain issues).
Without such an Agreement, a 10% Shareholder will be unable to pass the necessary resolutions to give effect to this “right” without new Company Law legislation.
I sincerely hope this proposal is not just a poorly considered populist vote catcher – but if it is to be treated as credible then significant further detail of the proposal is needed.
Director, Verisona Law