A private members’ club may choose to operate the club’s premises with the benefit of a club premises certificate or a premises licence granted under the Licensing Act 2003. In some cases, the club may choose to have the benefit of both authorisations.
It is worth considering the benefits and burdens of each type of authorisation in order to determine which may be preferable from a licensing point of view.
Club Premises Certificate
The application process for the grant of a new club premises certificate is very similar to the process in respect of a premises licence.
Only a “qualifying club” may apply for and hold a club premises certificate. In order to qualify a club must satisfy a number of conditions contained in the Licensing Act, including:
- Nobody can be admitted as a member without an interval of at least two days following their nomination or application for membership;
- A person who is admitted as a member other than by prior nomination or application must wait at least two days before they may enjoy the benefits of membership;
- The club must be established and conducted in good faith as a club;
- The club must have at least 25 members;
- Alcohol must not be supplied, or intended to be supplied, to members on the premises except by or on behalf of the club.
The Licensing Act contains additional conditions which a club must satisfy in relation to the supply of alcohol to members or guests:
- If the purchase of alcohol for the club is not managed by the club in general meeting or otherwise by the general body of members, it must be managed by a committee made up of members of the club who are at least 18 years old and have been elected by the members of the club.
- No person should receive, at the expense the club, any commission, percentage or similar payment relating to the purchase of alcohol by the club.
- No person should receive a pecuniary benefit from the supply of alcohol by on behalf of the club to members or guests.
Special provision is made in the Act for registered societies and friendly societies which provides that any such club is to be taken to satisfy the qualifying club conditions if certain requirements relating to their constitution and management are met.
The Act also contains special provisions relating to miners’ welfare institutes in so far as the qualifying conditions are concerned.
The Licensing Act contains a number of specific matters to determine whether a club is established and conducted in good faith:
- The club’s freedom to purchase alcohol;
- How money or property of the club is used for the benefit of the club as a whole or for charitable, benevolent or political purposes:
- The arrangements for giving members information about the finances of the club:
- The club’s books of account and other records;
- The nature of the club’s premises.
If the licensing authority decides that a club is not established and conducted in good faith as a club, the authority must give the club notice of the decision and of the reasons for it.
The Act also gives the power to the licensing authority to withdraw a club premises certificate where it appears to the authority that the club does not satisfy the conditions for being a qualifying club.
Provided that a club with the benefit of a club premises certificate retains its qualifying status, it will enjoy a number of benefits:
- Alcohol may be supplied to members and sold to guests without the need for anyone to hold a personal licence under the Licensing Act;
- Late night refreshment may be provided to members and their guests without the need for any authorisation;
- The police and authorised persons under the Licensing Act have limited rights of entry to club premises; and
- If a magistrates’ court makes an order for closure of licensed premises in an area when disorder is happening or expected, it will not apply to the club.
In addition to members of a club and their guests, the only other persons who may enjoy the facilities offered by the club are associate members of the club and their guests.
The Act specifies that a person is an “associate member” of a club if the person is admitted to the club’s premises, in accordance with the rules of the club, as a member of another club which satisfies the first three qualifying conditions previously mentioned.
The sale of alcohol to a guest of a member for consumption off the club premises is not a qualifying club activity. This is emphasised by conditions which are attached by the Act to a club premises certificate which authorises the supply of alcohol for consumption off the premises:
- A club premises certificate can only authorise the supply of alcohol for consumption off the premises provided that it also authorises the supply to members for consumption on the premises;
- The supply for consumption off the premises can only be made when the premises are open for the supply of alcohol to members for consumption on the premises;
- Any alcohol supplied for consumption off the premises must be in a sealed container; and
- Any supply of alcohol for consumption off the premises must be made to a member of the club in person.
Commercial clubs, which are usually owned by individuals or companies, operate for the benefit of the proprietor and not the members. As such, they cannot be qualifying clubs and will not be able to apply for a club premises certificate. They will need to operate under the authority of a premises licence.
As can be seen, the provisions of the Licensing Act severely restrict the range of persons allowed to use the premises occupied by a private members’ club if it operates under the authority of a club premises certificate.
The certificate clearly does not allow alcohol to be sold or supplied to members of the public.
It may be suggested that it is possible to circumvent such restrictions by creating a category of temporary membership within the rules of a club, in order to allow individuals to have immediate access to the club. However, the 48-hour requirement in the qualifying conditions does not allow that to take place.
It is still possible to create some flexibility within the rules concerning the definition of a guest of a member, but there must always be at least one individual who is a member of the club in order to introduce the guests.
In order to derive greater commercial benefit from their premises, some private members’ clubs have obtained a premises licence as an alternative, or in addition to, a club premises certificate.
From a club’s point of view, the additional requirements created by a premises licence include:
- Where a premises licence authorises the supply of alcohol, it is a condition that no supply of alcohol may be made as a time when no designated premises supervisor has been specified in the licence or at a time when the designated premises supervisor does not hold a personal licence or the personal licence has been suspended.
- A premise licence that authorises the sale of alcohol requires that every supply of alcohol under the licence must be made or authorised by a person who holds a personal licence.
- The need to ensure that the provision of late night refreshment is authorised by the licence, if required.
- The police and other authorised persons under the Licensing Act have greater rights of entry to licensed premises.
A private members’ club may apply to the licensing authority for a club gaming permit or club machine permit.
Both permits allow a club to provide a maximum of three gaming machines which may be either category B3A, B4, C or D.
Normally, the permits would require renewal every ten years. However, they will remain in force as long as a club retains the benefit of a club premises certificate.
Both permits are subject to a condition that the gaming facilities may only be used by a person who:
- Is a member of the club who applied for membership, was nominated for membership or became a member, at least 48 hours before using the facilities, or
- Is a guest of a member of the club.
If a private members’ club is operating under the authority of a premises licence and does not have the benefit of a club gaming permit or a club machine permit, the gaming machine entitlements are different.
A premises licence allows the holder to provide a maximum of two gaming machines of either category C or D. In order to provide more than two gaming machines it is necessary for a premises licence holder to apply to the licensing authority for a licensed premises gaming machine permit.
There is no restriction on the number of gaming machines which may be requested, it is matter for the licensing authority as to how many are allowed provided that they are only category C or D machines.
The entitlement to provide a maximum of two gaming machines under a premises licence does not apply if gaming machines are made available on the premises under the authority of a club gaming permit or a club machine permit.
Before a private members’ club makes a decision to apply for a premises licence it would be advisable for the club to obtain specialist advice from an accountant concerning the implications for the club as far as tax is concerned.
If you're interested in any of the topics raised in this article, or for further information, please contact David Lucas. Alternatively, you can call to speak to one of the team on 0115 9888 777.