Incorporation of the Lotus 7 Club of Great Britain

Dear Member,

Given all the changes that have been discussed over the last six months with regard to the running of the Club, I thought it was appropriate to write to you individually to explain these changes in a little more detail.

The Lotus 7 Club of Great Britain is currently an unincorporated association with over 2,000 members.  The status of an unincorporated association means that each member is jointly and severally liable for the indebtedness of the Club.  This could affect you if, for example, somebody made a successful compensation claim against the Club for an injury sustained at a Club event.  If the Club’s capital reserves were insufficient to meet the claim in full and/or the Club was not fully insured against such a claim, the claimant could pursue each and every member for their contribution to the outstanding liability.

In order to avoid this potential liability for members, the Team, after a unanimous vote in favour and after presenting the proposal to the Area Organisers, has decided to incorporate the Club into a company limited by guarantee.  I am pleased to report the necessary steps are well under way.  A company limited by guarantee has now been formed with the name Seven Club Limited (company number 3880568).  To coincide with the membership renewal, every element of the Club will be transferred into Seven Club Limited on 1^st January 2000.  Consequently, you will all be subscribing at that date to become members of the Company.   In order to maintain the status quo as much as possible, the Company whilst called Seven Club Limited, will trade as and will continue to be known as Lotus 7 Club of Great Britain.

The main advantage of transferring the Club into a company limited by guarantee is that the Company is a separate legal entity entirely in its own right and therefore, each member’s maximum liability is limited to the amount of the guarantee, being £1.  Under the new structure, the Club will be required to comply with the legislation applying to limited companies.  This legislation brings with it standards of reporting and accountability which will be in all our interests to promote the efficient and proper running of the Club.  It is intended that the members of the Team will agree to become directors of the Company.  As you may be aware, company directors are subject to a number of fiduciary duties and may, in limited circumstances (fraudulent or wrongful trading), be personally liable to the Company’s creditors notwithstanding the guarantee of £1.  In order to protect the Company’s directors, we have been advised to maintain directors’ liability insurance which I hope you will agree is essential to ensure that “volunteers” will still come forward to serve on the Company’s Board.

The Company’s constitution is made up of the Memorandum of Association, Articles of Association and Rules & Byelaws adopted by the Company’s Board.  It is the Rules & Byelaws that contain the majority of the administrative regulations of the Company.  These have been compiled as far as possible using the Club’s current constitution.

All members when completing their membership renewal will be bound by the Company’s constitution.  To keep cost under control, a copy of the Company’s constitution will be circulated to all Area Organisers.  If you would like to obtain your own copy, please write to Gordon Cardew  (Club Treasurer and Secretary of the Company) at 10 Main Street, Bilton, Rugby, Warwickshire, CV22 7NB.

I hope the above is useful in explaining the changes we are undertaking on your behalf to bring the Club into the next millennium.  The Team believes these are essentially behind the scenes changes that will not significantly impact on the Club’s activities after 1^st January 2000.

Roger Swift
Chairman
Lotus 7 Club of Great Britain

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The LOTUS SEVEN CLUB is the trading name of Seven Club Ltd., (Company Registration Number 3880568) whose registered office is Devonshire House, 1 Devonshire Street, London. W1W 5DR