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JGM
JGM, Solicitor
Category: Law
Satisfied Customers: 11546
Experience:  30 years as a practising solicitor.
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A local organisation has run a 200-club years. Only

Customer Question

A local organisation has run a 200-club years. Only members of the organisation can buy tickets at £2 each, maximum 200 tickets in total club. Half the proceeds are paid out monthly as a cash prize to the one ticket drawn randomly. Over the last 12 years numerous changes in the officers has resulted in no draws taking place, and the number of members has dwindled. A resolution has been passed to wind up the 200 club. About £13,000 has been received from members in the last 12 years (therefore £6,500 is supposedly prizemoney) which money is still, fortunately, in the bank accounts. The 200 club came under the definition of a small club and did not need approval or registration with anyone, as far as we can ascertain.
The organisation itself is ongoing and is facing extraordinary expenditure in the near future. It would be ideal if the 200-club members would agree to waive their rights to any prizes during this period, meaning we have no need to conduct any draws and can keep the £6,500. We are pretty sure that most members would be happy with this, but of course we need to contact them and get their agreement. However, there could be some who don't agree, in which case we would have to conduct the draws and ask prizewinners to forfeit all or part of their winnings. Does this seem "legal"? What do we do about members we cannot trace any more or who have died?
The local organisation, whilst autonomous, is "overseen" by a national organisation who seem to have no idea about 200 clubs and no interest in advising us.
Chris
Submitted: 2 years ago.
Category: Law
Expert:  JGM replied 2 years ago.
Thank you question.
The law on this is not codified anywhere given that you are exempt from registration.
Because of this, however, the answer is quite simple. If you can get agreement from all of the existing members that can be traced, the money can be utilised funds. If you can get this agreement you'll have to run the draws and then see how many of the prize winners would agree to donate the winnings to the club.
The club has to be seen to be acting fairly and any specific decision on this should be minuted along with the reasons decision.
Happy to discuss further.
Please leave a positive response so that I am credited time.
JGM and 2 other Law Specialists are ready to help you
Customer: replied 2 years ago.

Am I right in thinking there is a typo in the fourth sentence, it should read "If you can't get this agreement.....". I was much confused by this. Or do you mean we must run the draws anyway?

I am also confused by your use of the word "club". Maybe it's a generic term, but I used the word "club" to refer to the 200 club. So are you saying that if we get agreement from 200-club members the monies can be used benefit of the organisation in general, not just 200 club? It is a fact that the 50% not paid out in prizes went to the organisation in general.

And just to clarify, are you saying that we only need to take reasonable steps to identify the members, i.e. we don't have to start advertising in the London Gazette, if it still exists. Would just writing to them at their last known address be sufficient?

Customer: replied 2 years ago.

22:09 EST



Am I right in thinking there is a typo in the fourth sentence, it should read "If you can't get this agreement.....". I was much confused by this. Or do you mean we must run the draws anyway?



I am also confused by your use of the word "club". Maybe it's a generic term, but I used the word "club" to refer to the 200 club. So are you saying that if we get agreement from 200-club members the monies can be used benefit of the organisation in general, not just 200 club? It is a fact that the 50% not paid out in prizes went to the organisation in general.



And just to clarify, are you saying that we only need to take reasonable steps to identify the members, i.e. we don't have to start advertising in the London Gazette, if it still exists. Would just writing to them at their last known address be sufficient?


Expert:  JGM replied 2 years ago.
I am on GMT.
Yes, typo in the second sentence should be "can't".
The "organisation" can use the funds if you can get agreement from all those that can be traced after taking reasonable steps. A letter would suffice in my opinion.