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Changes to the associations incorporations laws

Changes to the associations incorporations laws

Changes to the association laws came into effect on 1 September 2016, including amendments made to the Associations Incorporation Act 2009 (the Act) and a new Regulation.

The following is a summary of the key changes:

  • An association is no longer required to reserve a name prior to making an application to register an association, or an application to change an association’s name;
  • The official address of an association must be in NSW. It must be an address where the public officer can generally be found and where documents can be served on the association by post. The official address cannot be a post office box;
  • From 1 September 2016 there are three new matters that every Constitution must address:
  1. The maximum number of consecutive terms of office of any office-bearers on the committee (if specified)
  2. Ballots can be postal or electronic (the electronic voting method is new)
  3. The winding up of the association;
  • An association will be able to put a resolution to its members in a postal ballot or in an electronic ballot, where this is permitted by an association’s constitution. A postal ballot or an electronic ballot is to be conducted in accordance with Schedule 3 of the Regulation;
  • At common law, there are duties on committee members. The Act currently deals with a committee member’s duty to disclose conflicts of interest and the duty to not dishonestly use their position or information obtained as a committee member. The Act currently includes a requirement that a committee member must not allow an association to trade whilst insolvent. From 1 September 2016, the Act will also provide for the duty of each committee member to carry out their functions for the benefit of the association, so far as practicable, and with due care and diligence;
  • From 1 September 2016, the Act will provide protection from personal liability for committee members (or a person acting under the direction of a committee member) who act in good faith while undertaking the committee member’ functions under the Act. This also covers any omissions that were made in good faith;
  • Associations must keep their financial records and minutes in written or electronic form. If kept in electronic form, they must be able to be converted into hard copy. The financial records of an association must be kept for a minimum five year period;
  • The fee schedule has been changed. In particular, the fees for lodging the annual financial return has been reduced for Tier 2 associations and increased for Tier 1 associations.

The NSW Department of Fair Trading has advised that any association wishing to update its constitution as a result of the amendments to the legislation will not be required to pay a fee to register the change until 1 September 2017.

Changes to the Model Constitution coming into effect on 1 September 2016 will automatically apply to all associations that have already adopted the Model Constitution.

For further information please contact the office or refer to the NSW Department of Fair Trading’s website.

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