ACT Associations Incorporations Act 1991

Most community local sporting clubs are established as incorporated associations.  In the Australian Capital Territory, incorporated associations are governed under the Associations Incorporation Act 1991.

The Office of Regulatory Services (ORS), which is part of the Department Justice and Community Safety oversees the Associations Incorporation Act 1991 and provides a highly informative website for clubs who have registered or considering registering as an incorporated association.  The ORS website can be accessed by clicking on the following link:

http://www.ors.act.gov.au/community/associations

The ORS also provide a fantastic 34 page Associations Incorporations Practice Manual which contains a lot more detailed than the Sports Community summary below.  The practice manual can be accessed by clicking on the following link:

http://www.ors.act.gov.au/resources/attachments/Associations_Practice_Manual.pdf

 

The Associations Incorporation Act 1991 provides registered clubs and associations with guidance and direction on the following topics:

  • Forming and incorporated association
  • Information to be included in incorporated association rules
  • Amalgamating one or more existing incorporated associations
  • Memberships
  • Responsibilities for running meetings
  • Appointment and responsibilities of office holders
  • Financial reporting requirements
  • Processes for winding up incorporated associations

While the Associations Incorporation Act 1991 covers far more associations that sporting clubs we are only looking at the act from a sports club perspective so for the remainder of this summary will refer to the incorporated association as a club.

This following information should be treated as a guide only. Your club should contact the Office of Regulatory Services or seek advice specific to the needs of your club when considering its obligations under the Associations Incorporation Act 1991.

 

Naming conventions and requirements

The name of the club (incorporated association) must have the word ‘Incorporated’ as the last word of its name or the abbreviation ‘Inc’.

For example

Tuggeranong Vikings Hockey Club Incorporated or Tuggeranong Vikings Hockey Club (Incorporated), or Tuggeranong Vikings Hockey Club Inc.

Clubs must ensure that its full name appears on:

  • All notices, advertisements and club publications
  • All business documents
  • Common seal

If clubs fail to include their name in full on the above documents they may be fined.

Changing your club name

If a club wishes to change its name, it must first receive approval of clubs members to make the change by having a special resolution passed by members as per the rules of the club.

Clubs must notify the register-general using the correct form provided on the ORS website which can be accessed by clicking the following web link:

http://www.legislation.act.gov.au/af/2013-2/default.asp

 

Public Officer

Every club must have a public officer, who must be over the age of 18 and reside in the Australian Capital Territory.

If the role of Public Officer becomes vacant for any reason then the club committee must appoint a person with 14 days of the position falling vacant.

If the committee does not comply with these obligations then each member of the committee maybe committing an offence and heavy penalties may apply.

 

Duties of the public officer 

The ORS Practice Manual (page 17) defines the role of the public officer as:

“The public officer acts as the contact between the association and the ORS. The public officer is the person the ORS will contact to notify the association of legislative requirements, including lodgement of annual returns. Additionally, the ORS may contact the public officer to provide information to the association or to notify changes to legislation or procedures.”

 

Notification responsibilities

The person who is appointed as your club’s public officer must lodge with the register general a “Notice of Appointment” within one month of being appointed.  The Notice of Appointment Form can be accessed by clicking on the following link:

http://www.ors.act.gov.au/community/associations/forms_and_fees

If the public officer changes their address then they must within one month lodge with the register general a notice of change.  The Notice of Change Form can be accessed by clicking on the following link:

http://www.ors.act.gov.au/community/associations/forms_and_fees

Failure to comply with the reporting obligations may result in financial penalties being applied.

 

Committees

It is the responsibility of the committee to manage the affairs of the association.  Each club must have a committee of at least three members.

If a member of your club becomes a member of your club’s committee or ceases to ceases to be a member of your clubs committee or changes their address then the club must notify the register general within one month of each change.

Failure to comply with the reporting obligations may result in financial penalties being applied.

 

Nomination and election of the club committee and office holders 

The procedures to nominate and elect committee members are contained in the Rules of your club.

To be eligible and to join the committee an individual must be:

  • is 18 years or over;
  • live in the ACT
  • entitled to vote at an general meeting.

Those generally prohibited from being on your clubs committee 

The following individuals are disqualified from being on committees of associations and clubs:

  • A person convicted anywhere (not just ACT) of an some indictable offences (see Clause 63 of the Act for more definition)
  • A person who is insolvent under administration

Disqualified people may make application to the Supreme Court to ease restrictions in certain circumstances.

Heavy fines may apply if disqualified individuals take up certain roles with your club.

 

Material personal interest (conflict of interest)

If a member of the club committee has any direct or indirect pecuniary interest in a contract or proposed contract to which the club is or maybe a party the committee member must disclose the nature and extent of their interest as soon as it becomes apparent. 

The committee member must also disclose the nature and extent of the interest at the next general meeting of the association.

The details the material personal interest must be included in the minutes of the committee meeting it was first disclosed. 

Penalties may apply to the club if personal conflicts are not immediately disclosed.

 

Considering the issue

The member of the committee with an interest in a contract being considered by the committee must not take part in any decision making in relation to the contract or proposed contract but in some circumstances participate in deliberations in relation to the matter.

There are exceptions to these rules relating to personal interests which are contained in section 65 of the Act, particularly where the interest exists because the individual is an employee of the club.

 

Objects and Purpose of the Association

You club must have a clearly define purpose or objects which appear in the clubs statement of association’s objects which must be lodged with the register-general within one month of the objects being adopted or altered through a special resolution of the association being passed by the voting members.

The form to lodge your club’s statement of objectives can be accessed by clicking on the following link:

http://www.ors.act.gov.au/community/associations/forms_and_fees

Fines may apply if the register general is not notified of your club objectives or changes to your club objectives.

 

Rules of the Incorporated Association (club) 

Before a club can be registered as an incorporated association it must have documented rules.  Clubs have the choice of developing their own rules or adopting the model rules which can be accessed on the ORS website by clicking the following link:

http://www.ors.act.gov.au/publication/view/1292/title/model-rules

When applying for incorporation clubs must complete a checklist relating to their rules which can be accessed by clicking:

http://www.ors.act.gov.au/resources/attachments/Association_Constitution_and_Rules_Checklist.pdf

Regardless of if clubs develop their own Rules or adopt the Model Rules, their Rules must include the following information:

  1. The name of the club,
  2. The financial year of the club
  3. Membership qualification rules and any fees to be paid by members
  4. Define the members liability towards payments of debts and liabilities of the association
  5. Disciplinary and appeal procedures
  6. Dispute resolution procedures
  7. The name, membership and powers of the committee
  8. Process for electing committee members
  9. Term of office of committee members
  10. Grounds by which committee positions become vacant
  11. Processes for filling casual vacancies on the committee
  12. The quorum and meeting procedures of committee and general meetings
  13. Clear procedures on how members can inspect any books or documents of the association
  14. Clear definition of intervals between general meetings, the procedure to call general and special general meetings and whether members are allowed to vote by proxy at these meetings
  15. How custody of club records are going to be maintained
  16. How custody of the club common seal to be maintained and how it is to be used
  17. Sources of club revenue and procedures for managing these funds, in particular processes for drawing and signing cheques and paying expenses

 

Altering your club’s rules

Clubs can only alter their club rules by special resolution.  If a club changes (or adopts) their club rules they must notify the register general within one month of the special resolution being passed.  The notification will need to contain a declaration by at least 2 committee members of the club that the special resolution for the rule change was passed by the members of the club.

Rule changes to not come into effect until they have been accepted by the register general.

Penalties may apply for failure to lodge rule changes with the register general.

 

Register of members

The Club must keep and maintain a register of members.  The register must contain the following information:

  • The person’s name and address
  • The date the person became a member 

If the member register is not updated accurately and in a timely manner then the club may be fined.

 

Inspecting the member register

The rules of the club must define the process for accessing the members register and the times they can do so.

The club must also publish with each annual return the address the register is available for inspection.

 

Meetings 

General Meetings

A club must not hold a general meeting of the club unless each member of the club who is entitled to vote at general meetings

  • has been given notice of the date, time and place of the general meeting in the manner provided by the rules of the association; and
  • if the rules of the association require that voting by proxy must be done using a standard form—has been given that form with the notice.

It is important clubs do not take any action with the intention of prevent a member to attend or vote at a general meeting.

 

Annual General Meetings

A club must hold an annual general meeting at least once each calendar year and must be held within five months of the end of the club’s financial year.

Special Resolutions

If clubs wishes to pass special resolutions at their annual general meeting they need to ensure 21 days notice of the proposed resolution has been provided to members as per the procedures in the Club Rules and the notice shall include:

  • The date, time and place of the general meeting
  • The full proposed resolution
  • The intention to raise the resolution as a special resolution

The special resolution will be passed if less than 75% of members of the club entitled to vote, vote in person or if the club rules permit, voting by proxy, vote by proxy at the meeting.

 

Financial Reporting

Record keeping

Clubs must keep records which correctly explain its transactions, financial position and performance.  The club record keeping must enable true and fair financial statements to be prepared as well as being conveniently and properly audited.

 

Content of financial statements

The financial statements must not be misleading and must give a true and fair account of:

  • income and expenditure during the most recent financial year
  • the assets and liabilities  at the end of the financial year
  • any mortgages, charges and securities of any description affecting any property of the club 

If the club is a trustee of a trust then additional reporting requirements must be included.

 

Presentation of financial statements to members

At each club Annual General Meeting the committee must present the following documents:

  • the club audited financial statements
  • a copy of the auditor’s report
  • a report signed by two committee members stating:
    • the name of each committee member during the most recent financial year
    • the clubs principle activities
    • the club’s net profit or loss for the year just completed
    • The committee must have at least 100 copies of the financial statements and auditors report available for perusal by members before and during the Annual General Meeting.

Lodgement of financial statements

Within six months from the end of the clubs financial year it must lodge with the register general:

  • A Statement of Particulars relating to the club
  • An audited statement of the clubs accounts
  • A copy of the auditor’s report
  • A statement signed by two committee members certifying whether provisions of the ACT applied during the year 

To access the forms required to lodge the financial statements of the club click on the link below:

http://www.legislation.act.gov.au/af/2013-86/notification.asp

 

Retention of financial statements 

Clubs must retain financial statements and accompanying certificates and reports to annual general meetings for at least seven years after the meeting.

The club may be liable for significant penalties if it fails to comply with any and all parts of its financial reporting and lodgement obligations.

 

Audit requirements

Club committees must make reasonable steps to ensure the audit of the clubs accounts is completed at least 14 days prior to the financial statements being presented to club members at the Annual General Meeting.

The accounts of the club must be audited by a person who is:

  • Not an officer of the club
  • Has not prepared or assisted in the preparation of the accounts

If the club has one of the following characteristics:

  • gross receipts at the end of its financial of more than $400,000
  • gross assets of more than $400,000
  • has more than 1,000 members
  • holds a licence under the Liquor Act 2010

The committee must ensure the clubs accounts are audited by a person who is a member of either the Institute of Chartered Accountants in Australia, the National Institute of Accountants, or CPA Australia, or who is registered as an auditor under the Corporations Act.

If your club has gross receipts of greater than $1,000,000 for the clubs financial year then the auditor must also be registered as an Auditor under the Corporations Act.  For these clubs the Auditor has additional levels of responsibility.

Regardless of their professional qualifications the clubs auditor must not be:

  • an officer of the club
  • a partner, employer or employee of a club officer
  • a partner or employee of an employee of an officer of the association

The club may be liable for significant penalties if it fails to comply with any and all parts of its audit obligations.

 

Auditor’s rights

Your club auditor has the right of access at all reasonable times to the accounting records and other records of the club and is entitled to ask any officer of the club for any information or explanation the auditor desires for the purpose of auditing the accounts.

If the auditor believes there has been a failure to comply with the Act or with a club rule they must note the matter in the Auditors Report.

There are heavy penalties for obstructing an Auditor from reviewing the clubs financial affairs.

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