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Difference between public and private golf clubs


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This is about - in the Malaysian context - publc and private (or proprietary) golf clubs. I am interested to hear comments and opinions from anyone about this topic. There is a lot of notes under the 'speakers notes', perhaps if you download the files you can read them.

Published in: Investor Relations, Sports
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Difference between public and private golf clubs

  1. 1. Public, Proprietary &Members’ Golf ClubThe differences(Malaysian context)
  2. 2. In this topic• Discussion about differences• Scenarios of setting up a club• Comparisons• Truth about membership and public
  3. 3. Public Club• Almost an oxymoron• A club by definition is an association of twomore people united by a common interest.• To show association: fill up form and join• Then it becomes membership club!• More accurate: a club open to the public• Club = a place• It is a business
  4. 4. To set up a club• A company can (T & C apply)• A club on its own cannot own land or manytypes of investment (Societies Act 1966)• Must set up an incorporated body• Or set up a public limited company
  5. 5. Scenario 1• A group wants to set up a golf club.• They start a club (society/association) underthe Societies Act.• One or several of them have to holdproperties on behalf of all.• Or don’t own any properties; just operate.• Intention is not to profit• Examples:
  6. 6. Scenario 2• A group wants to set up a golf club• Set up a Public Limited Company (limited byshares)• Buy land for the golf club• Can start subsidiaries Just like any othercompany• Proprietary club or members’ club also can.• Example:
  7. 7. Scenario 3• A group wants to set up a golf club• They set up a PLC (limited by guarantee)• Get permission; then buy land• Must use profits for its own objectives• Cannot start subsidiary• Many members’ clubs• Examples:• Some cases committees are directors.
  8. 8. ComparisonSocieties/Assoc/Club• Pros– Less formalities & expenses– 7 or more persons– Limited liability• Cons– No separate legal identity– Cannot hold property– Cannot sue or be sued asitself; but by name ofmembersCompanies• Pros– Separate legal entity– Limited liability– Minimum 2 person– Easy to transfer ownership– Borrowing power• Cons– Public can access info– Assets belong to company– Cost of incorp/winding up– Tedious procedure to windup
  9. 9. Members vs PropietaryMembers Club• Members own the club• Members control clubthrough electedcommittee• Can do trade by providingfacilities to non-memberson a commercial basisProprietary Club• A main proprietor own theclub• A business with view toprofit• Burden is on buyer toprotect himself
  10. 10. Membership• Do you want membership?• Or public?• That is the question• In this context• Kinrara and Seri Selangor?• Or Kota Permai and Tropicana?• Management point of view.
  11. 11. Membership vs Public ClubMembership/Proprietary• Requires RM5m capital• Limits to membership• Must follow guidelines• Must have prospectus• Renewable 6 months• Have liaison committee• Members’ interestsafeguardedPublic• Is a business entity• Limited by physicalconstraints.• No committee.• Company interest comefirst
  12. 12. Pro of membership• If membership well sold; subscriptionassures income• If membership taken up: customer base• Recession proof• If membership can be sold to developerwho can package it with property.
  13. 13. Cons of membership• Members think they own the club (they do)• Limited time for walk-in golf (more profit)• Special pricing for members• As part of committees, member want tohave a say in everything
  14. 14. In this topic• Discussion about differences• Scenarios of setting up a club• Comparisons• Truth about membership and public