NSW Associations Incorporations Act 2009

Most community local sporting clubs are established as incorporated associations. In New South Wales, incorporated associations are governed under the Associated Incorporations Act 2009.

The NSW Office of Fair Trading oversees the Associated Incorporations Act 2009 and provides a highly informative website for clubs who have registered or considering registering as an incorporated association. The NSW Office of Fair Trading can be accessed by clicking here.

The Associations Incorporation Act 2009 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

This following information should be treated as a guide only. Your club should contact the NSW Office of Fair Trading or seek advice specific to the needs of your club when considering its obligations under the Associations Incorporation Act 2009.

Naming Conventions and Requirements

The full name of the association including the word ‘Incorporated’ or the initials ‘Inc.’ must appear in legible characters on official documents, including all business letters, statements, invoices, receipts, notices and publications (including the associations website).

For example

Randwick Rugby Club Incorporated or Randwick Rugby Club (Incorporated)

Clubs must ensure that its full name and registration number (which is issued by NSW Office of Fair Trading) appears on:

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

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

Changing Your Club Name

To change its name an association must:

  • Reserve the proposed name by lodging an Application for reservation of name Form A1 with NSW Fair Trading which can be accessed by clicking on the link below

http://ablis.geometryit.com/resource/NSW/State/AP4550a.pdf

  • Pass a special resolution, agreeing to the name change
  • Lodge an Application for approval for change of name Form A7, including:

–      A copy of the special resolution

–      The original certificate of incorporation

–      The prescribed fee

The club secretary must notify the NSW Fair Trading Registrar within 28 days of the meeting where the special resolution to change the club name was passed.

Clubs must notify NSW Fair Trading using the correct form provided on the NSW Fair Trading website which can be accessed by clicking on the following link:

http://services.geometryit.com/resource/NSW/State/AP4550j.pdf

If clubs fail to notify NSW Fair Trading of their name change within 28 days in the prescribed manner they may be fined.

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.

The model rules can be accessed on the NSW Fair Trading website by clicking the following link:

http://www.fairtrading.nsw.gov.au/pdfs/About_us/Publications/FT412_Model_Constitution.pdf

If a club changes the model rules for any reason other than adding its name, its purpose and its financial year the club is deemed to have established their own rules and need to have these rules approved by the NSW Office of Fair Trading.

If a club chooses to adopt the Model Rules they come into effect as soon as the committee vote to adopt the Model Rules and do not need the approval of the NSW Office of Fair Trading.

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

  1. The name of the club
  2. The objects of the club
  3. Powers of the club
  4. Membership qualification rules and any fees to be paid by members
  5. The rights, obligations and liabilities of members
  6. Provisions for the cessation of membership or resignation of members
  7. Register of members
  8. Disciplinary procedures
  9. Subscription and Fees
  10. Existing Directors
  11. Power and Composition of the Board
  12. Dispute resolution procedures
  13. The name, membership and powers of the committee
  14. Process for electing committee members
  15. Term of office of committee members
  16. Processes for filling casual vacancies on the committee
  17. The quorum and meeting procedures, including the preparation and retention of accurate meeting minutes as well as procedures for members to access minutes of club meetings
  18. Delegating functions and tasks to special committees or individuals
  19. Clear definition of intervals between general meetings, the procedure to call general meetings and whether members are allowed to vote by proxy at these meetings
  20. The time within which notices of general meetings and notices of motion must be given, published or circulated
  21. Procedures for the appointment and removal of the club secretary
  22. How custody of club records are going to be maintained
  23. How the club common seal (if any) is used
  24. Procedures for allowing members access to the business records of the club
  25. Sources of club revenue and procedures for managing these funds, in particular processes for drawing and signing cheques and paying expenses
  26. Procedures alter the rules of the club, including rescinding and adding new rules
  27. How club assets are to be treated upon winding up or dissolution of the club and how surplus assets are to be distributed
  28. Status and compliance of the club
  29. Identify the type of risks the club is subjected to

Grievance Procedures

a)      The grievance procedure applies to disputes between a Member and:

–      another Member; or

–      the Club

b)      The parties to the dispute must meet and discuss the matter in dispute, and, if possible, resolve the dispute within 14 days after the dispute comes to the attention of all parties

c)      If the parties are unable to resolve the dispute at the meeting or if a party fails to attend that meeting, then the parties must, within 10 days, refer the dispute for resolution to an independent tribunal established by the State Sport Organisation in accordance with the procedures determined by the State Sport Organisation from time to time

d)      The Board may prescribe additional grievance procedures in the Regulations

Changing Your Rules

Procedures on how your Club Rules may be altered will be contained in the Club Rules themselves.  Generally the Club Rules will require the following:

  • The committee proposes a change and notifies members at least 21 days before any general meeting (as per procedures defined in the Club Rules)
  • For a special resolution to be passed, a quorum must be present at the meeting, and at least 75% of those allowed to vote by the Club Rules must support it.

All changes to Club Rules must be lodged with NSW Fair Trading within 28 days of the special resolution being passed. Lodgement must be made on the NSW Fair Trading form which can be accessed from the NSW Fair Trading website by clicking on the following link:

http://ablis.geometryit.com/resource/NSW/State/AP4550h.pdf

The alteration of Club Rules does not take effect until approved by the Registrar (NSW Fair Trading).

Inspection of Club Rules

If a member of the Club requests to inspect the Rules of the Association they must be permitted within a reasonable time or the Club may be subject to penalties.

Register of Members

(1) An association must keep a register of committee members

(2) The register must contain the following particulars in relation to each committee member:

(a) The committee member’s name, date of birth and residential address

(b) The date on which the committee member takes office

(c) The date on which the committee member vacates office

(d) Such other particulars as may be prescribed by the regulations

(3) The register must be kept in New South Wales:

(a) At the main premises of the association, or

(b) If the association has no premises, at the association’s official address

(4) Any change in the committee’s membership must be recorded in the register within 1 month after the change occurs.

(5) The register must, at all reasonable hours, be kept available for inspection, free of charge, by any person.

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

Inspecting the Member Register

If a member of the Club request to inspect the member’s register they must be given access to inspect the minutes permitted within a reasonable time or the Club may be subject to penalties.

Using members information

Clubs must ensure they protect member’s personal information and that information is not obtained or disclosed from the member’s register to contact or send materials to the member.

The club may be heavily fined if the information held in the member’s register is improperly used.

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 preventing a member to attend or vote at a general meeting.

Annual General Meetings

A club must hold an annual general meeting within 6 months of the end of the club’s financial year.

Special Resolutions

If clubs wish 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 at least 75% of members approve the special resolution and all additional voting requirements contained in the rules have been passed.

Inspection of Meeting Minutes

If a member of the Club requests to inspect the minutes of a general meeting(s) they must be given access to inspect the minutes permitted within a reasonable time or the Club may be subject to penalties.

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:

  • 18 years or over; and
  • entitled to vote at a general meeting

Please note at least 3 committee members must reside in NSW.

Generally the Chairman would declare at an Annual General Meeting the positions within the club which are vacant and call for nominations for each position.

Separate elections are generally be held for each of the following positions —

  • President;
  • Vice-President;
  • Secretary;
  • Treasurer

If only one member is nominated for the position, the Chairperson of the meeting must declare the member elected to the position. If more than one member is nominated, a ballot must be held in accordance with rules of the Club.

On the election, of a new President the new President may take over as Chairperson of the meeting.

Electing a secretary

Clubs must have nominated secretary at all times.  If the role of secretary becomes vacant the role of the secretary must be filled within 14 days as per the rules of the Club.

If it is impractical for the club to hold an election then the committee must appoint a secretary until a person is able to be elected or appointed as per the Rules of the Club.

The new secretary must notify the NSW Office of Fair Trading of the change of secretary within 14 days of appointment.  Failure to do so may result in the club being fined.

Responsibilities of Club Office Holders

Club office holders are considered as any one of the following:

  • The chairman
  • The treasurer
  • The vice-chairman
  • The immediate past chairman
  • The Public Officer

Duty of Care

Club office holders must always exercise their powers and discharge their duties with the duty of care a reasonable person would expect.

Current and past club office holders must:

  • Act in good faith and a proper purpose
  • Ensure they do not have a material personal interest in the subject in question
  • Ensures they are fully informed about the subject in question to the level they reasonably believe is appropriate
  • Always makes decisions in the best interest of the Club
  • Not make improper use of information gained from holding their role at the club
  • Not gain an advantage for themselves or any other person
  • Cause detriment to the club

Some situations which give rise to conflicts of interest are:

(a)                   Office bearers taking advantage of opportunity:

The general rule is that an office bearer must not use his or her position to make a profit.  If he or she does, then he or she must account to the club for the profit made.

(b)                   Office bearer taking advantage of an opportunity where the club is unable:

Office bearers have an obligation not to profit personally from their position as an office bearer.  It may be a defence that the profits were made with the informed consent of the club.

(c)                    Office bearer contracts with the club:

The general rule is that contracts made by an office bearer with the club are voidable at the option of the club.  This includes contracts in which office bearers have an indirect interest.  The fairness of the contract is irrelevant, and this is applied as a strict rule.  The contract may be validated by ratification at a general meeting, provided there is full disclosure.

(d)                   Conflict of external duties with office bearers:

Where an office bearer holds an office or property which creates duties in conflict with their duties as office bearer of the club, they should declare the interest at the next meeting of the board after they become aware of the conflict.

Significant penalties may be applied if office holders do not act in a proper manner.

Conflict of Interest

All club officer bearers should consider whether they have any personal interest (either direct or indirect) in a matter being considered by the committee. If so, and if the interest appears to create a conflict with the person’s duty to the club, then this should be disclosed to the committee and details of the interest entered into a ‘Disclosure of Interests’ book.

As part of this disclosure the following information must be provided:

  • The nature and extent of the interest
  • The relationship between the club and the holder with the conflict of interest

A committee member who has disclosed a conflict of interests must not be present when the committee considers the matter. The committee member also should not be involved in the decision making process in any way. However, a person who has disclosed a conflict of interests can participate in the decision making process if the committee decides to allow this – provided that the committee decides this without the involvement of the person who has the conflict.

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

Exceptions to these disclosure rules are where the conflict of interest exists because the individual is an employee of the club or a category of member the club was formed to benefit.

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

Considering the issue

The member of the club who has the conflict of interest must not attend the committee meeting while the matter is being considered or vote held.

Penalties may apply if the relevant person is allowed to be present at the meeting.

If by excluding the committee member with the conflict of interest from the meeting means that a quorum is not possible then one or more committee members may call a general meeting where a resolution may be passed to deal with the matter.

Return of club documents

If a person holds club documentation as a result of their role within the club and that roles ceases the person must return all original documentation to the club within 14 days.

Failure to return club documents may result in significant penalties being applied.

Financial Reporting

Record Keeping

Clubs must keep records which explain its transactions, financial position and performance.  The club record keeping must enable true and fair financial statements to be prepared.

Preparation of Financial Reports

For the purposes of preparing financial reports each financial year associations will fall into one of two tiers.  Each tier, determined by total club revenue, has different reporting requirements.

Tier 1 associations are associations whose total revenue as recorded in the income and expenditure statement for a financial year exceed $250,000 (excludes GST) or current assets (defined as assets other than real property and capable of depreciation) exceed $500,000.

Tier 2 associations are associations whose total revenue as recorded in the income and expenditure statement are less than $250,000 (excludes GST) and current assets (defined as assets other than real property and capable of depreciation) are less than $500,000.

Total revenue is defined as the total income for the club in the last financial year of the club for all its activities (determined before the deduction of any expenses including cost of goods sold by the club).

Content of Financial Statements

The financial statements must contain the following information relating to the previous financial year:

  • Income and expenditure
  • 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.

Lodgement of Financial Statements

Tier 1 Associations: The association must ensure that the relevant documents are lodged with the Director-General 1 month after the AGM which must be held within 6 months of the end of the financial year unless approval has been granted for an extension of time to hold the AGM.

The association must lodge:

  • An Annual summary of financial affairs (Form A12) for the financial year
  • The financial statements for the financial year, presented at the AGM
  • The auditor’s report for the statements
  • A copy of the terms of any resolution passed at the AGM, concerning the financial statements and the auditor’s report

The prescribed fee must be paid at the time of lodgement of the documentation.

Tier 2 Associations: The association must ensure that an Annual summary of financial affairs (Form A12) for the financial year is lodged with the Director-General 1 month after the AGM which must be held within 6 months of the end of the financial year unless approval has been granted for an extension of time to hold the AGM.

The prescribed fee must be paid at the time of lodgement of the documentation.

The annual summary of financial affairs (Form A12) provided on the NSW Office of Fair Trading website can be accessed by clicking on the following link:

http://ablis.geometryit.com/resource/NSW/State/AP4550d.pdf

Retention of Financial Statements

The NSW Office of Fair Trading recommends that an association keep all books and registers for a minimum period of 7 years, including the:

  • Register of committee members
  • Register of disclosed interests
  • Minutes of meetings
  • Financial records

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.

Reporting Requirements – Tier One Clubs

The committee must ensure the financial statements for the association, and any trust for which the association acts as a trustee, are prepared and audited as soon as possible after the association’s financial year, for submission to the AGM.

Associations must prepare financial statements in accordance with Australian Accounting Standards.

The financial statements must also include details of any mortgages, charges and other securities affecting any property owned by the association.

The auditor’s report must be prepared in accordance with the Australian Auditing Standards and state whether the association has kept the necessary financial records to enable financial statements to be prepared in accordance with Australian Accounting Standards.

Statement Review

Tier one clubs must have their financial statements reviewed by an independent person who is a member of and holds a current practising certificate from either:

  • CPA Australia
  • The Institute of Chartered Accountants
  • Institute of Public Accountants

The review must be conducted in accordance with the Auditing Standards on Review and provide the club with a written report of the review. This written report must state the review was prepared in accordance with the Auditing Standards on Review Engagements and must state whether it was kept in a manner which allows the financial statements to be prepared in accordance with Australian Accounting Standards. 

Unless approved by the Director‑General in writing, an audit may not be carried out by any person who, within the last 2 years, is or has been:

  • A member of the association
  • An employee or provider of professional services to the association, a committee member or its public officer

AGM Reporting

The committee must present the previous financial years statements to the members at the first annual general meeting after the end of the financial year. The statements must give a true and fair view of the association’s affairs and must include:

  • An income and expenditure statement that sets out detailed income and expenses
  • A balance sheet that sets out assets and liabilities
  • Details of any mortgages, charges and other securities affecting any property owned by the association
  • A separate income and expenditure statement and balance sheet for each trust for which the association is the trustee

Reporting Requirements – Tier Two Clubs

The committee must ensure the financial statements for the association, and any trust for which the association acts as a trustee, are prepared as soon as possible after the association’s financial year, for submission to the AGM.

Generally tier two clubs do not need their financial statements reviewed or audited unless it is voted at a general meeting that they should be or the club is directed by the NSW Office of Fair Trading to have their financial statements reviewed.

AGM Reporting                                

The committee must present the previous financial years statements to the members at the first annual general meeting after the end of the financial year. The statements must give a true and fair view of the association’s affairs and must include:

  • An income and expenditure statement that sets out detailed income and expenses
  • A balance sheet that sets out assets and liabilities
  • Details of any mortgages, charges and other securities affecting any property owned by the association
  • A separate income and expenditure statement and balance sheet for each trust for which the association is the trustee

Return to top

    Share

Leave a Comment