How to Register a Sports Club in the Philippines

How to Register a Sports Club in the Philippines

Introduction

In the Philippines, a sports club is typically an organization formed to promote physical fitness, recreational activities, competitive sports, or community engagement through athletic pursuits. These clubs can range from local community groups focused on amateur sports like basketball or running, to more structured entities involved in national or international competitions. Registering a sports club grants it legal personality, allowing it to enter contracts, own property, sue or be sued, and operate formally. This is particularly important for securing funding, organizing events, or affiliating with governing bodies.

The primary legal framework for registering a sports club is as a non-stock, non-profit corporation under the Revised Corporation Code of the Philippines (Republic Act No. 11232, enacted in 2019). This code replaced the old Corporation Code (Batas Pambansa Blg. 68) and streamlined the process for non-stock corporations, which are ideal for clubs since they do not distribute profits to members. Sports clubs generally qualify under Section 87 of the Revised Corporation Code, which covers corporations organized for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social, civic service, or similar purposes.

Alternative structures exist, such as partnerships or sole proprietorships, but these are less common for sports clubs due to their profit-oriented nature. If the club intends to operate for profit (e.g., a commercial gym masquerading as a club), it might register as a stock corporation or under the Department of Trade and Industry (DTI) for business names. However, this article focuses on the non-profit model, as most sports clubs emphasize community and development over commercial gain. For specialized cases, like cooperatives, registration falls under the Cooperative Development Authority (CDA) via Republic Act No. 9520 (Philippine Cooperative Code of 2008), but this is rare for sports clubs unless they involve shared ownership models.

Registration is handled primarily by the Securities and Exchange Commission (SEC), with potential involvement from other agencies like the Philippine Sports Commission (PSC) for accreditation if the club seeks national recognition. The process emphasizes compliance with anti-money laundering laws, data privacy (under Republic Act No. 10173), and good governance principles.

Legal Basis and Requirements

Governing Laws

• Revised Corporation Code (RA 11232): Defines non-stock corporations and outlines incorporation procedures. Key sections include:
  • Section 14: Contents of Articles of Incorporation.
  • Section 87: Definition and purposes of non-stock corporations.
  • Section 88: Rights of members.
  • Sections 94-96: Trustees and governance.
• Philippine Sports Commission Act (RA 6847, as amended): Establishes the PSC as the lead agency for sports development. While not directly for registration, clubs may need PSC accreditation for funding or national sports association (NSA) status under this law.
• Philippine Olympic Committee (POC) Charter: For clubs aiming for Olympic-level sports, affiliation with the POC is required, but this follows SEC registration.
• Bureau of Internal Revenue (BIR) Rules: For tax-exempt status under Section 30(E) of the National Internal Revenue Code (RA 8424, as amended), if the club is organized exclusively for recreational or social purposes.
• Local Government Code (RA 7160): Requires business permits from the local government unit (LGU) post-registration.
• Other Relevant Laws: Anti-Hazing Act (RA 11053) if the club involves initiations; Child Protection laws (RA 7610) for youth sports; and Environmental Compliance if facilities are involved.

Eligibility and Prerequisites

• Incorporators: At least five (5) natural persons, majority of whom must be Philippine residents. No citizenship requirement for all, but foreigners must comply with foreign investment restrictions if applicable (e.g., land ownership).
• Purpose Clause: Must clearly state non-profit objectives, such as "to promote sportsmanship, physical health, and community unity through [specific sport] activities."
• Capital/Membership: No minimum capital; instead, focus on membership contributions or dues. Assets must be used solely for club purposes.
• Prohibitions: Cannot engage in partisan political activities or distribute income to members (Section 87, Revised Corporation Code).

Step-by-Step Registration Process

Step 1: Name Verification and Reservation

• Choose a unique name that includes words like "Club," "Association," or "Society" (e.g., "Manila Runners Sports Club Inc.").
• Verify availability via the SEC's online portal (SEC i-Register at www.sec.gov.ph). Submit a Name Verification Slip.
• Reserve the name for 30-90 days upon approval, paying a nominal fee (around PHP 100-500, subject to updates).
• Ensure the name does not infringe trademarks (check with Intellectual Property Office of the Philippines, IPOPHL).

Step 2: Draft Key Documents

• Articles of Incorporation (AoI): Must include:
  • Corporate name.
  • Purpose (e.g., fostering sports development, organizing tournaments).
  • Principal office address.
  • Term of existence (perpetual under RA 11232, unless specified otherwise).
  • Names, nationalities, and residences of incorporators.
  • Number of trustees (at least 5, not more than 15).
  • Amount of contributions or endowments.
  • Provisions for membership admission, rights, and termination.
  • Signed by incorporators and notarized.
• By-Laws: Detail internal rules, including:
  • Membership qualifications and dues.
  • Meeting schedules (annual general meeting required).
  • Election of officers and trustees.
  • Fiscal year and auditing.
  • Amendment procedures.
  • Dissolution clauses (assets to similar non-profit upon dissolution).
• Treasurer's Affidavit: Certifies initial contributions (e.g., PHP 1,000 minimum, but no strict amount).
• Endorsements (if applicable): For sports clubs seeking NSA status, obtain endorsement from the relevant NSA or PSC.

Use SEC-prescribed forms available online. Engage a lawyer for drafting to ensure compliance.

Step 3: Submission to SEC

• File online via SEC's Electronic Simplified Processing of Application for Registration of Corporation (eSPARC) system or in-person at SEC offices (main in Makati or extensions nationwide).
• Required attachments:
  • Verified AoI and By-Laws.
  • Treasurer's Affidavit.
  • List of members/contributors.
  • Favorable endorsement from PSC if claiming sports-related exemptions.
  • Proof of payment.
• Processing time: 3-7 working days under the Ease of Doing Business Act (RA 11032).

Step 4: Payment of Fees

• Filing fee: Based on authorized capital or assets (for non-stock, minimal; e.g., PHP 2,000-5,000).
• Legal research fee: 1% of filing fee.
• Documentary stamp tax: As applicable.
• Fees are payable via bank or online.

Step 5: Issuance of Certificate

• Upon approval, SEC issues a Certificate of Incorporation, granting corporate existence.
• The club is now a juridical person.

Post-Registration Obligations

Tax Registration and Exemptions

• Register with BIR within 30 days for a Taxpayer Identification Number (TIN) and Certificate of Registration (COR).
• Apply for tax-exempt status if qualifying under BIR Revenue Regulation No. 13-98 (non-stock, non-profit for social welfare).
• File annual information returns (BIR Form 1702); exempt from income tax on related activities but liable for VAT if gross receipts exceed thresholds.

Local Permits and Compliance

• Secure Mayor's Permit/Business Permit from the LGU where the principal office is located.
• Barangay clearance.
• Sanitary, fire safety, and environmental permits if operating facilities (e.g., a clubhouse or field).
• Register with PhilHealth, SSS, and Pag-IBIG if hiring employees.

Affiliation with Sports Bodies

• Philippine Sports Commission (PSC): Apply for recognition to access grants or facilities. Requirements include SEC registration, by-laws aligned with PSC guidelines, and a development program.
• National Sports Associations (NSAs): Affiliate with sport-specific NSAs (e.g., Philippine Football Federation for soccer clubs) for competition eligibility.
• Philippine Olympic Committee (POC): For higher-level clubs, seek membership through NSAs.
• Compliance with RA 10699 (National Athletes and Coaches Benefits and Incentives Act) if developing athletes.

Ongoing Compliance

• Annual reports to SEC (General Information Sheet, Audited Financial Statements).
• Hold regular meetings and elections.
• Maintain books of accounts.
• Adhere to Data Privacy Act for member information.
• If fundraising, comply with solicitation permit rules from DSWD.

Challenges and Considerations

• Costs: Initial registration ~PHP 5,000-20,000 (including legal fees); annual compliance ~PHP 10,000+.
• Time: 1-2 months total, including drafting.
• Common Pitfalls: Incomplete documents, name conflicts, or failure to specify non-profit status leading to tax issues.
• Dissolution: Voluntary via SEC filing; assets distributed to similar entities.
• Special Cases:
  • School-based clubs: May register under DepEd or CHED guidelines.
  • Professional clubs: If profit-oriented, register as stock corporation and comply with professional league rules (e.g., PBA for basketball).
  • Foreign involvement: Subject to 60/40 equity rule if land-owning.

Conclusion

Registering a sports club in the Philippines formalizes its operations and unlocks opportunities for growth and support. While the SEC process is straightforward, consulting legal experts ensures alignment with evolving regulations. Once registered, focus on governance to sustain the club's mission in promoting sports as a pillar of Philippine society. For updates, refer to official SEC and PSC websites, as laws may amend.