Clubs must be qualifying clubs. A qualifying club has general conditions it must satisfy:
- a person may not be given memberships or be a candidate for membership to any membership privileges without an interval of at least two days from their membership application or nomination and their membership being granted
- club rules must state that those becoming a member without nomination or application cannot have membership privileges for at least two days between them becoming members and being admitted to the club
- the club is established and conducted in good faith
- the club has at least 25 members
- alcohol is only supplied to members on the premises on behalf of or by the club
In a qualifying club there is technically no sale by retail of alcohol (except to guests) as the member owns part of the alcohol stock and the money passing across the bar is merely a mechanism to preserve equity between members where one may consume more than another. In order to constitute a qualifying club you must also satisfy the various requirements set out in the Licensing Act 2003.
Additional conditions in relation to the supply of alcohol must be complied with:
- alcohol purchased for and supplied by the club is done by members of club who are over 18 years of age and are elected to do so by the members
- no person at the expense of the club receives any commission, percentage or other similar payment in regard to the purchase of alcohol by the club
- there are no arrangements for anyone to receive a financial benefit from supplying alcohol, apart from any benefit to the club or to any person indirectly from the supply giving a gain from running the club
Registered industrial and provident societies and friendly societies will qualify if the alcohol purchased for and supplied by the club is done under the control of the members or a committee of members.
Relevant miners' welfare institutes can also be considered. A relevant institute is one that is managed by a committee or board that consists of at least two thirds of people appointed or elevated by one or more licensed operators under the Coal Industry Act 1994 and by one or more organisations who represent coal mine employees. The institute can be managed by the committee or board where the board cannot be made up as detailed above but is made up of at least two thirds of members who were employed or are employed in or around coal mines and also by people who were appointed by the Coal Industry Welfare Organisation or by a body who had similar functions under the Miners' Welfare Act 1952. In any case the premises of the institute must be held on a trust as required under the Recreational Charities Act 1958.