Owners and Directors Test in English Football Explained

Bury Football Club was expelled from the English Football League in August 2019, 134 years after it was founded, because it could not satisfy the league that it had the money to complete the season. Nobody involved in the ownership of the club had failed the owners and directors test. That is not a paradox. It is the clearest possible statement of what the test was designed to do and what it was never designed to do.

The test asks one question: does this person meet any of a list of specific disqualifying conditions? If the answer is no, the test is passed. It does not ask whether the buyer can afford the club, whether they intend to keep it, whether the money is theirs, or whether they have the faintest idea how to run a football business. Those questions were left to the market, and the market's answer, across three decades of English football, has been a run of administrations, expulsions and near-death experiences documented in English clubs in administration.

The framework is now changing, through a statutory regulator with powers the leagues never had. What follows sets out how the existing tests work, where they were shown to be weak, and what the new regime adds.

What the test checks, and the longer list of what it does not

Take the Premier League version as the model, because the EFL's is structurally similar and the FA's follows the same logic further down the pyramid.

A person who wants to become an owner or a director of a club must complete a declaration. In it they confirm, against a defined list, that none of the disqualifying conditions applies to them. The league then makes its own checks against that declaration. If nothing on the list is engaged, the person may proceed.

The list is objective by design. Every item on it is a matter of record — a conviction, a bankruptcy order, a directorship disqualification, a ban from another sport's governing body. That objectivity is the point. A test built on judgement about character would be litigated by every rejected buyer with the resources to do it, and the league would have to prove a subjective assessment in front of a tribunal. A test built on records is defensible.

The cost of that design is everything it leaves out.

The test does not assess whether the buyer has enough money. It does not verify where the money came from, beyond what the enhanced rules now require. It does not consider whether the acquisition is being funded by debt secured against the club itself, which is the mechanism behind leveraged buyouts in football. It does not evaluate a business plan, and until recently it did not ask for one in any meaningful form. It does not test competence at all.

An "owner" in this context is not simply the person who bought the club. The rules define it by control — holding 30 per cent or more of the shares or voting rights, or otherwise being able to exercise control over the club. The threshold matters because it determines who has to be assessed and who can sit behind a structure without being looked at.

That definition catches the obvious cases. Whether it catches every structure designed to avoid it is a harder question, and it is one the statutory regime has had to address directly.

The disqualifying conditions

The lists differ in detail between competitions and have been amended repeatedly, so the authoritative version is always the current rulebook rather than any summary. The categories, though, are stable.

Category	What it covers	Why it is there
Criminal convictions	Unspent convictions for dishonesty, corruption, fraud, violence, and offences involving children	Direct integrity risk, and the original core of the test
Custodial sentences	Unspent convictions carrying a custodial sentence above a defined length	Catches serious offending not covered by the named categories
Insolvency	Undischarged bankruptcy, individual voluntary arrangements, and equivalents abroad	A person who cannot manage their own finances managing a club's
Company director disqualification	Being disqualified from acting as a director under UK law or an overseas equivalent	Already judged unfit to run a company by a court
Sporting bans	Being banned by a sports governing body, in any sport, in any country	Prevents forum-shopping between sports and between jurisdictions
Multiple insolvency events	Having held control of clubs that suffered a defined number of insolvency events	Aimed squarely at serial club owners who leave wreckage behind
False information	Providing false, misleading or incomplete information to the competition	Makes the declaration itself enforceable
Immigration status	Being a person prohibited from entering the United Kingdom	An owner who cannot lawfully enter the country cannot run a club in it

The Premier League has extended its own list beyond this base more than once. The extensions have brought in grounds relating to UK government sanctions and to conduct that would constitute a human rights abuse, along with tighter drafting on control and on the information a prospective owner must supply. The wording has been revised as it has been applied, so the Handbook is the only safe source for the current formulation.

Two features of the list are worth pausing on.

Almost everything on it is backward-looking. It records what a person has already done and had proved against them. A buyer with no adverse record and every intention of extracting value from a club passes without difficulty.

And the conditions largely attach to individuals. A structure in which the individual with real influence sits behind a corporate chain, a trust, or a nominee is harder to assess, which is why the definition of control has been repeatedly tightened and why source-of-funds work became the priority.

Three competitions, three rulebooks

There is no single English test. There are three, and a club moving between divisions moves between them.

The Premier League operates its test under the Handbook, assessed by the league board. It has the most detailed version, the most extensive disclosure requirements, and the largest compliance function behind it.

The EFL runs its own test across the Championship, League One and League Two, with a significant addition the Premier League has less need for: a prospective owner must satisfy the league on future funding. That means demonstrating the resources to run the club for the season ahead and providing a source-of-funds declaration. It exists because EFL clubs lose money as a matter of course, and an owner without working capital is not a theoretical risk in those divisions.

The FA administers the test for clubs in the National League System and in the women's game, on the same disqualification principle, with a lighter compliance apparatus because the clubs are smaller and the transactions are less complex.

	Premier League	EFL	FA
Rulebook	Premier League Handbook	EFL Regulations	The FA Handbook
Assessed by	Premier League board	EFL	The FA
Future funding requirement	Limited	Yes, including proof of resources for the season	Limited
Typical transaction	Large, often international, complex structures	Wide range, from local buyers to overseas funds	Small, usually domestic

A promoted club carries its owner into the Premier League's regime, and the league reassesses. Relegation works in reverse, with the EFL's funding requirements engaging on the way down — at exactly the point a club's finances are under most strain, which is one of the awkward interactions between the ownership rules and the financial rules in the Championship's financial regulations.

Source of funds, and the gap the Fan-Led Review named

The Fan-Led Review of Football Governance, chaired by Tracey Crouch and published in November 2021 after Bury's expulsion and the collapse of the European Super League proposal, put the ownership tests near the centre of its diagnosis.

Its criticism was not that the tests were being applied badly. It was that they were testing the wrong thing.

The review recommended a strengthened test built on three elements the league versions did not properly contain: an integrity assessment going beyond a list of convictions, a due diligence process examining the source of the buyer's wealth, and a requirement to demonstrate sufficient funding for the club rather than merely for the purchase.

That third element is the one supporters recognise instinctively. A buyer can have the money to acquire a club and none of the money required to run it. Acquisition is a single payment. Operation is a recurring deficit, month after month, in a business where the largest cost is contracted years in advance and cannot be reduced quickly, as Premier League wage bills sets out.

Source of wealth and source of funds are separate questions and both matter. Source of wealth asks how the buyer became rich in the first place. Source of funds asks where the specific money for this specific transaction is coming from, and whether it is borrowed, and if borrowed, against what. The second question is the one that reveals whether the club is about to be used as collateral for its own purchase.

The leagues had begun tightening in this direction before the review reported. What the review provided was a rationale for putting the checks on a statutory footing, where refusal is a regulatory decision backed by legislation rather than a commercial judgement by a members' association whose members are the clubs.

A takeover, step by step

The public version of a takeover is a rumour, a period of silence, and an announcement. The regulatory version runs to a sequence.

1. 1ApproachProspective buyer opens talks with the existing owner; nothing is filed with anyone at this stage.
2. 2Heads of termsOutline commercial agreement is reached, usually with exclusivity and a period for due diligence.
3. 3NotificationThe club notifies its competition that a change of control is proposed, triggering the formal process.
4. 4IdentificationEvery person meeting the definition of owner or director in the proposed structure is identified and must be assessed.
5. 5DeclarationsEach of those persons completes the owners and directors declaration against the disqualifying conditions.
6. 6AssessmentThe competition verifies the declarations, examines the ownership structure, and reviews source of funds and future funding.
7. 7DecisionThe competition confirms whether any disqualifying condition applies; the EFL also considers the funding evidence.
8. 8CompletionShares transfer, the change of control is registered, and directors are formally appointed.
9. 9Ongoing dutiesThe new owner assumes continuing obligations to disclose changes and to submit annual declarations.

The sequence a change of control follows under competition rules. Timings vary widely and a complex structure can extend the assessment stage by months.

Two things about that sequence are frequently misreported.

The competition does not approve the price, the strategy, or the identity of the buyer in any positive sense. It confirms an absence of disqualification. A statement that a takeover has passed the owners and directors test is not an endorsement, and the leagues have been careful in their wording precisely because it would be wrong to imply otherwise.

And the process runs in parallel with things it has no control over. Regulatory clearances in other jurisdictions, competition authority review where the buyer holds other sporting assets, and the club's own financing arrangements all proceed on their own timetables. A takeover that appears to stall on the league's desk is often waiting on something else entirely.

Cases that put the test under pressure

Bury is the starting point. The club's expulsion in 2019 followed a failure to demonstrate that it could fund the season, and it exposed the distance between an ownership test that examines records and a football club that requires cash every Friday.

Wigan Athletic entered administration in July 2020, weeks after a change of control had been completed under the EFL's rules. The club was in the Championship at the time and the collapse triggered an independent review commissioned by the EFL into how the transaction had been assessed. The episode drove the argument for source-of-funds scrutiny more powerfully than any submission to a select committee.

The sale of Chelsea in 2022 raised a different question. The UK government imposed sanctions on the club's then owner, and the club was subsequently sold under a special licence issued by the government, with the proceeds ring-fenced. Nothing in the league's ownership test had contemplated a scenario in which a sitting owner became sanctioned, and the machinery that resolved it was governmental rather than sporting. The Premier League's subsequent extension of its disqualifying conditions to cover sanctions followed directly from that experience.

The Newcastle United takeover in 2021 tested the definition of control itself. The central question was whether a sovereign state would be in control of an English football club, and the takeover completed after the Premier League stated it had received legally binding assurances that the Saudi Arabian state would not be. Whether assurances of that kind can be verified, and by whom, is a question the episode raised and did not settle.

Across the EFL there is also a long, less newsworthy pattern: clubs sold to buyers with no adverse record, running out of money within eighteen months, and being sold again. No test failure occurs at any point in that cycle. That is the pattern the regulator exists to break.

What the independent regulator changes

The Football Governance Act 2025 created a statutory regulator for the men's professional game in England, covering the top five tiers, and it changes the ownership question in four ways.

Clubs require a licence to operate. Ownership is a condition of that licence rather than a private commercial matter between buyer and seller.

The regulator applies its own owners and directors test, sitting alongside the competition tests rather than replacing them. A buyer can therefore satisfy a league and still not satisfy the regulator.

The test is a suitability test rather than only a disqualification test. It examines fitness, honesty and integrity, financial soundness, and the source of the funds being used. That last element is the substantive break with what came before.

And the regulator has powers over incumbents. Where an existing owner is found unsuitable, the statutory regime provides for intervention, up to and including requiring a divestment, with the practical difficulties that entails in a country where property rights are not lightly overridden.

Implementation is phased, and the sequencing between licensing, testing and enforcement has been set out in the regulator's own framework rather than fixed in detail by the legislation. Anyone reading this some way from the Act's passage should check the current position rather than assume the regime is fully in force. The detail of the regulator's remit, including its financial powers, is covered in the independent football regulator explained.

The obvious criticism is that a regulator which can block a buyer without producing a better one leaves a club stranded. That is a real tension. The answer the legislation implies is that a club with no owner and a licence is in a better position than a club with the wrong owner and no cash, which is a judgement about which the game is not unanimous.

The limits of what a regulator can fix

Nothing in the statutory regime makes an English football club a good investment, and that is the constraint underneath everything else.

Most clubs below the Premier League lose money in a normal season. The buyer pool for a loss-making business with a passionate customer base, a listed stadium and no realistic exit is small, and raising the standard a buyer must meet necessarily shrinks it further. A regulator that screens rigorously will, over time, be blamed both for the owners it admits and for the vacancies it creates.

There is also a jurisdictional ceiling. The regulator's writ runs to the top five tiers of the English men's game. It has no power over what happens in the jurisdictions where money and ownership structures often originate, and verifying beneficial ownership through a chain that passes outside the UK depends on cooperation it cannot compel.

The realistic claim for the new regime is narrower than the coverage around it suggested. It closes the funding gap that the league tests left open, it puts source of wealth on a statutory footing, and it gives someone the standing to say no before a club fails rather than after. What it does not do is guarantee that a well-run club emerges at the other end.

Directors, shadow directors and who gets assessed

The test is named for owners and directors, and the second half of that gets less attention than it deserves.

Every director of a club must be assessed, not only those with a shareholding. The definition follows company law and reaches beyond people with the title. It captures de facto directors — those who act as directors without ever being appointed — and shadow directors, being persons in accordance with whose instructions the board is accustomed to act.

That second category is the important one. An owner who holds no formal position but whose views determine every decision is a shadow director, and the rules are drafted to catch exactly that arrangement. Proving it is a different matter, and it generally requires the kind of documentary evidence that only emerges in litigation.

Senior executives who are not directors sit outside the test. A chief executive who is not on the board is not assessed under it, though other regulations govern their conduct.

Where a club sits inside a group, the assessment has to work upwards through the structure until it reaches the individuals with ultimate control. Trusts, nominee arrangements and multi-jurisdiction holding chains all make that harder, and the resources available to a league's compliance team are not unlimited. Verifying beneficial ownership through several jurisdictions is expensive, slow, and occasionally impossible when a jurisdiction does not maintain a public register.

Fan-owned clubs face the opposite problem, since a supporters' trust has no controlling individual at all. The rules accommodate that through the assessment of elected directors, and the model itself is set out in supporters' trusts and fan ownership.

What an approved owner still owes afterwards

Passing the test is not a permanent clearance. Three continuing obligations follow.

An annual declaration confirming that no disqualifying condition has arisen since the last one. A duty to notify the competition, within a period specified in the rules, if a disqualifying event does occur. And a duty to notify any change in the ownership structure, including movements in shareholdings that cross the control threshold.

Alongside those sit disclosure requirements that have grown steadily: identifying ultimate beneficial owners, reporting related-party transactions, and filing accounts and financial information to the competition on a timetable that runs ahead of the Companies House deadline. Financial monitoring under PSR and the EFL's equivalents runs on the same information.

The declaration is what gives the rules teeth. Supplying false or incomplete information is itself a disqualifying condition, which converts a lie on the form into an independent ground for removal that does not depend on proving the underlying conduct.

The obligations nobody notices until they bind

Two further duties sit quietly in the rulebooks and surface only when something goes wrong.

The first concerns loans made by an owner to the club. Owner funding is normally advanced as a director's loan rather than as equity, because a loan can be repaid and equity cannot. Competitions require that funding to be disclosed and, in the EFL's case, to be evidenced as available rather than merely promised. A club apparently solvent on the strength of an owner's loan facility is solvent only for as long as the owner chooses to keep the facility open.

The second concerns dual interests. An individual may not hold a material interest in more than one club in the same competition, and the rules extend to interests held through associates and connected parties. That restriction exists to protect the integrity of results, and it has become harder to police as multi-club ownership groups have expanded across Europe, buying clubs in different countries that can subsequently qualify for the same UEFA competition. The domestic version of the problem is simpler and the prohibition is firm.

When an owner becomes disqualified after approval

The awkward scenario for any ownership regime is not the buyer who fails the test. It is the owner who passed it three years ago and would fail it today.

The rules deal with this by making disqualification a continuing condition rather than a one-off gate. A person who becomes bankrupt, is convicted of a listed offence, is disqualified as a company director, or becomes subject to sanctions ceases to be permitted to act as an owner or director from that point. The obligation to report it falls on the person themselves, which is the weakest link in the chain, and the competition's own monitoring is the backstop.

Enforcement then runs into the practical problem that a shareholding is property. A competition can direct that a person stop acting as a director, and that direction is straightforward to enforce because the appointment can simply be terminated. Directing that a person dispose of shares is a different order of difficulty. There is a market to find, a price to agree, and a seller with no incentive to accept a distressed valuation, all while the club continues to need funding from the person being removed.

The sanction available at the end of the process is aimed at the club, not the individual: registration embargoes, points deductions, and in the last resort expulsion from the competition. That is a blunt instrument pointed in an uncomfortable direction, and it is one reason the statutory regime provides for the regulator to act directly rather than relying on a members' association to discipline one of its own members' owners.

1. 1TriggerA disqualifying event occurs, or the competition becomes aware of one that was not disclosed.
2. 2NotificationThe owner is required to notify the competition; failure to do so is itself a rule breach.
3. 3Board considerationThe competition board determines whether a disqualifying condition applies to the person.
4. 4DirectionIf it does, the person is directed to cease acting as an owner or director within a specified period.
5. 5DivestmentThe shareholding must be disposed of, or reduced below the control threshold, within the time allowed.
6. 6Non-complianceFailure to comply exposes the club to sanction, which can include a points deduction or, ultimately, expulsion.
7. 7Regulatory overlayUnder the statutory regime, the regulator can act on suitability grounds independently of the competition's decision.

The escalation route under competition rules. Timescales are set in each rulebook and the practical outcome depends heavily on whether the owner cooperates.

The uncomfortable feature of that ladder is where the sanction lands. Points deductions and expulsion punish the club and its supporters for the conduct of an owner they did not choose and cannot remove, which is the structural criticism of football's disciplinary architecture generally, and the reason points deductions provoke the arguments they do.

Following a takeover as a supporter

Most of the useful information about a takeover is public, and very little of it appears in the coverage.

Companies House is the first stop. Every English club is a company, and a change of control produces filings: confirmation statements listing shareholders, changes to persons with significant control, appointments and resignations of directors, and any charges registered over the company's assets. That last one answers the question that matters most. A charge registered against the club at the time of a purchase means the acquisition is secured against the club itself.

The competition's own announcements are the second source. Leagues confirm when a change of control has been notified and when the assessment concludes, and the wording is deliberate and worth reading closely.

Supporters' trusts are the third and are often ahead of everyone. A well-run trust reads filings, asks questions in public, and holds meetings with prospective owners that the club would rather not hold. Where a trust holds a golden share or a stake, it has standing that individual supporters do not.

Golden shares and heritage protections

One further document is worth hunting for: the club's articles of association, also filed at Companies House. Some English clubs have entrenched protections written into them, covering the club name, the colours, the crest and any move away from the home ground. Where such a provision exists, it typically requires the FA's consent, or the consent of a special shareholder, before those things can be changed.

The FA's own rules provide a backstop on several of these, requiring consent for a change of club name and for a relocation, and the statutory regime adds protections around heritage assets and a requirement to consult supporters on matters of significance.

None of that constrains an owner's day-to-day decisions. It constrains the handful of decisions that would make the club unrecognisable, which is a narrow protection and, in the history of English clubs that have moved grounds or changed identity under new ownership, not a trivial one. A supporter assessing an incoming owner is entitled to check what protections exist before the sale rather than discover afterwards that there were none.

What you will not find is the assessment itself. The competitions do not publish their reasoning, the declarations are not disclosed, and a refusal is rarely announced as a refusal — a buyer who is going to fail usually withdraws first. That opacity is a legitimate grievance and one the statutory regime addresses only partly, since commercially sensitive and personal information cannot simply be published.

The rest of the money and governance material in this section sits at /england, with the wider game covered at /sports/football and the season's writing collected on the blog.