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Sports law defines rules of investment in clubs - Daily News Egypt

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Sports law defines rules of investment in clubs

Clubs have right to develop resources, sports investment, intellectual property, and public performance of matches


Sports law No. 71 of 2017 sets rules for establishing sports clubs, their types, rules, and the formation of teams and memberships.

Article 105 of the law defines the types of sports clubs as public or popular clubs, companies’ clubs, and investment clubs.

The law defines the rights of sports clubs, including the enjoyment of self-management through the general assemblies of the club, the establishment of internal regulations to manage the affairs of clubs of all kinds, the establishment or membership in the national sports federations of all kinds, and participation in local, regional, and international events.

This is in addition to the right of public clubs to obtain subsidies from the state and government entities, or subsidies to support activities and the right to develop resources, sports investment, intellectual property, and the public performance of games and activities.

The law allows clubs to establish branches, after the approval of the board of directors, the general assembly, and the competent administrative authority, with the same moral identity of the original club by a special regulation proposed by the board of the original club. It shall be approved by the competent administrative authority after approval by the general assembly.

The club shall also have the right to expand the construction of sports or administrative buildings after obtaining the necessary licenses legally for the approval of the competent administrative authority.

As for investments, the law gives sports clubs the right to establish joint stock sports companies, following the corporate law, and stipulates their establishment to invest in a sports-related field.

The board of directors who represent the companies’ contributions are elected directly by the club’s general assembly. Members of the representative council are elected to match the remaining contributions. However, the share of the club in the companies’ capital should not be under 51% at the time of establishment or during a capital increase. Half the remaining balance of the capital can be allocated in a public offering.

The companies can exploit the name of the club, its playgrounds, facilities, brands, and t-shirts, according to the laws and regulations.

The budget of the investment company of the club is a special budget, according to the Companies Law, provided that the total votes of the general assembly of the club represent the share of their club only in this regard, with the authorisation of proxy or one of the members when presenting the budget.

The law states that the company is not entitled to interfere in the club’s assets in any kind of transactions from selling, mortgage, or other. The company provides 1% of the annual net profit for the Sports Fund established by the Ministry of Sports.

As for Article 106, it explains the conditions for establishing public clubs, including a minimum number of 100 members, or eight members if they are legal persons. The club must have a fixed headquarters and places suitable for activities.

In addition, the law also stipulates the availability of technical, sports, and administrative requirements, including establishments, equipment, facilities, and experts to issue licenses.

The law states that the club must have enough resources to spend on activities. Private clubs must provide a deposit in one of the government banks. The competent minister determines the number of members according to the club’s area with the allocation of the land from the governmental body that owns the land of the club. In all cases, the total area of the club must be more than 1,500 sqm.

The club shall provide the necessary papers for announcing its establishment to the sport-related entity, which will decide on the request within three months. The concerned body has to register the documents in the related registry.

Article 107 includes announcing the club temporarily if any of the conditions are not met, except for the headquarters rule. This shall be for one year only, which is subject to a one-time renewal.

Finally, Article 191 of the law gives the companies’, factories’, and government agencies’ clubs legal persons status with independence to continue providing social, sports, health, and family care for their members.

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