The Associations Incorporation Act – Queensland 1981 is an act of the Parliament of Queensland to regulate the affairs of incorporated associations.
The Act allows associations such as community, recreation, sporting and not-for-profit clubs and societies, to incorporate as legal bodies and limit the liability of members for lawful activities.
Associations incorporated under the Associations Incorporation Act 1981 are required to be accountable to the Office of Fair Trading by providing audited financial returns on an annual basis. To be incorporated
To incorporate an association in Queensland, you must be a:
- Group with at least seven members
- Not-for-profit association
- Be formed for a lawful purpose
To incorporate, an association needs to convene a general meeting. At this meeting, several decisions must be made. An association must:
- Pass a motion to incorporate by resolution
- Choose an appropriate name
- Adopt a set of operating rules
- Elect a President and Treasurer (two different people must hold these positions)
- Choose to elect a Secretary and other officers
- Lodge an application with the Office of Fair Trading
Why become Incorporated?
Without being incorporated, an association has no separate legal identity from its members and must rely on individuals to do things for it in their own names. This means that the responsibility for debts and other legal obligations will usually fall back on the management committee members even if they are operating according to a written constitution.
Other reasons for why your organisation may wish to become incorporated are as follows:
- To be able to apply for grants and funding
- To have access to a sporting ground and facilities
- To protect individuals in the association from being sued
- So your members can join most sports associations or league competitions
- To allow your association to draw up contracts, sue or be sued
Please note Associations Incorporations legislation is governed at the state rather than federal level, therefore requirements vary between states. Office of Fair Trading is the organisation responsible for incorporated associations in Queensland. The Office of Fair Trading website has an excellent range of fact sheets and other information to assist groups with incorporation issues. For further information regarding requirements of, and applications for incorporation, contact:
Office of Fair Trading P: 13 74 68 W: www.fairtrading.qld.gov.au
Why you wouldn’t become Incorporated?
Incorporation requires regular and ongoing compliance with Government regulation. There is a cost in fulfilling each of the requirements in both time and money. Incorporation also means being open to public scrutiny.
Matters to consider prior to looking at incorporating are:
- Being prepared to forgo total privacy of the clubs financial matters and accept that there will be public scrutiny of the clubs activities
- Being prepared to follow the regulations as set down by government. This may not give you the total flexibility that your club has now
- Weigh up the risk associated with being incorporated against the benefits of incorporation
- Most incorporated clubs will be required to have compulsory public liability insurance
- proper membership records and minutes must be kept
The benefits of incorporating your club include:
- Simplifies and clarifies the management and ownership of the money and other assets of the club. Bank accounts are held in the name of the club. Assets are purchased and owned by the club. The club can enter into contracts.
- Provides some legal and financial protection for the management committee of the club who otherwise might be liable for damages and contractual obligations arising from the activities of the club. Without incorporation, a group has no separate legal existence. Incorporation protects committee members from most personal liability but leaves them with the responsibility to act honestly and prudently.
- Clarifies and formalises the objectives of the club. To become incorporated, clubs need to state clearly the purposes for which they are being formed. The purposes, frequently known as the objects of the club, are fixed in the rules of the club (also known as the constitution). The regulating body must be advised of any changes.
- Sets out regulations about how the club shall operate. These regulations are designed to ensure that the club operates fairly, responsibly and accountably to its members. They also protect against dishonesty and manage matters such as conflict of interest. Being incorporated also requires that some information is regularly made available to the regulating body and to the public about the affairs and operations of the club.
- Allows clubs to apply for a much wider range of public and private funding. Many government and philanthropic organisations make it a basic requirement that applicants for funding are incorporated.
- Allows some incorporated bodies to enjoy tax advantages. Considering the benefits incorporation provides within this Act, the cost for incorporation is a worthwhile investment. Once incorporated, there are some regular compliance tasks required such as the keeping of records, holding of elections and submitting of returns.
There are some drawbacks to becoming incorporated that ought to be kept in mind. These are that the association will be regulated more closely by the State, incur expense in obtaining incorporation and ongoing accounting expenses, and the constitution required by an incorporated body may not suit some associations.
Specifically some drawbacks may be:
- Having to include ‘Inc’ or ‘Incorporated’ as part of the association’s name
- The accounts of larger association must be audited annually
- The accounts are subject to public scrutiny, if filed with the Department
- Initial application expenses and annual expenses for audits (if required)
- Transfer costs of land and property to the incorporated association
- It is difficult and expensive to terminate the incorporated association
- Restrictions on the activities that an incorporated association can carry on
- The structure of the incorporated association must be fairly democratic
- An annual meeting must be held every year and the committee must meet once every four months
- Most incorporated associations will be required to have compulsory public liability insurance
- Proper membership records and minutes must be kept.
Often these problems can be minimised by seeking volunteer assistance from lawyers, accountants and the general community. In some cases community organisations must incorporate to receive government grants or licences (e.g. Gaming and liquor permits) and there is little alternative.
Roles and Responsibilities for club
- Management Committee
The management committee is ultimately responsible to the members for the operation of the sporting club. This includes following, interpreting and enforcing the rules and making sure the club complies with the law.The rules of an incorporated association must set out provisions for the management committee including:
• How committee members are elected and appointed
• Terms of office of committee members
• Grounds or reasons for which a committee position may become vacant
• Filling casual vacancies occurring on the committee
• The quorum (minimum number of committee members who must be present to conduct a committee meeting)
• The procedure at committee meetingsThe management committee is also responsible for managing the affairs of the sporting club and has several responsibilities under law.The management committee must:
• Control the business and operations of the club
• Ensure the club complies with its rules on calling and holding meetings
• Ensure minutes of all committee and general meetings are kept
• Ensure an appropriate Secretary is elected or appointed
• Ensure a copy of the club’s rules is available to all members
• Keep public liability insurance current, if the club holds any
• Have a nominated address for documents to be served (this must be a physical address, not a Post Office Box)
• Register land or interests in land gained by the club because of its incorporation
• Ensure the club’s name appears on the common seal
• Ensure the club’s full name appears on all official documents such as advertising, business letters, accounts, official notices, publications, cheques and receipts
• Notify the Office of Fair Trading within one month of changes of office bearers (President, Treasurer or Secretary), the club’s postal address or the Secretary’s residential address
• Ensure proper accounting records are kept which correctly record and explain the transactions of the club and its financial position
• Ensure the financial affairs are audited or verified annually
• Ensure that an AGM is held each year within six months of the end of the club’s financial year
• Ensure the audited or verified financial statements of the accounts of the club are submitted to members at the AGM
• Lodge an annual return using the form your club is sent by the Office of Fair Trading
- Management Committee Members
Members of the committee should:
• Be aware of the duties of the Secretary and ensure they are properly carried out
• Use reasonable care and skill in the performance of their duties
• Act in good faith
• Advise the committee of any conflict that may arise between their own interests and the interests of the club (e.g. advise if any club activities might result in a financial gain to themselves)
• Ensure any documents addressed to the club are brought to the attention of the committee as soon as practicable after receipt
• Ensure documents provided to the Office of Fair Trading or submitted to members do not contain or omit anything that make them false or misleadingThe management committee must have at least three members. The committee must include the offices of President and Treasurer (one person cannot be both President and Treasurer). All clubs must have a Secretary and many choose to include this position on the management committee.You must notify the Office of Fair Trading of any changes to the positions of President, Secretary and Treasurer within one month of the vacancy occurring using Associations Incorporation form 10a—Change of details relating to an incorporated association. This form is available from (www.fairtrading.qld.gov.au). Lodgement details are included on the form. All members of the management committee must be 18 years of age or older. The Secretary must be a resident of Queensland or be living within 65km of the Queensland border, however there is no such requirement for other committee members. A person is ineligible for election to the management committee if they have been convicted on indictment, imprisoned or are bankrupt. For specific details refer to Section 61 of the Associations Incorporation Act 1981.
The Secretary is primarily responsible for managing the records of the sporting club.The Secretary will also:
• Take and keep minutes for the club’s meetings
• Keep the register of members
• Take nominations for the management committee
• Provide appropriate notice to members for meetings
• Call and convene special general meetings
• Arrange the meeting venue and prepare the agenda
• Coordinate any correspondence or reports to be presented at meetings
• Circulate the minutes of meetings to members
• Complete any actions arising from meetings that require correspondence
• Receive all club correspondence and bring urgent matters to the attention of the President or Treasurer if necessary.
The Treasurer is responsible for the financial management of the sporting club.The Treasurer will:
• Keep and maintain an asset register for the club
• Manage the petty cash balance and ensure the petty cash book is kept up-to-date
• Keep all documentation for payments made including receipts, invoices and statements
• Keep and maintain the club’s deposit and cheque books
• Ensure that all payments are approved or ratified by the management committee and that they are recorded in the minutes
• Keep all financial records in Queensland
• Keep either a receipt book of consecutively numbered receipts, or computer system records of them.
The rules of your sporting club should specify the qualifications for membership (if any). The rules should also set out the circumstances in which a member ceases to be a member. For example, if failure to pay an annual membership fee will result in the termination of a membership, this must be specified in the rules.Your sporting club is required to keep a register of members. It is also recommended you keep a register of committee members as part of your records. The rules require that the register of members be open to inspection by member’s at all reasonable times. If disclosure of your membership details would put you at risk of harm, you can apply to the management committee for details (other than the member’s full name) to be withheld from the register under the rules.
The purpose of your sporting club and the nature and amount of business it conducts will determine how frequently meetings should be held and who should attend.Your club is required to meet at least once a year (AGM) and the management committee must meet at least once in every four months (management committee meetings). The management committee should meet as often as necessary to properly manage the affairs of the club. Other meetings might include special general meetings and subcommittee meetings.
Management Committee Meetings
Management committee meetings must be held according to the rules. Usually the rules provide that the committee determines the time and place.The rules usually provide that notice of a management committee meeting is given in the way determined by the committee.In the case of a special management committee meeting, under the rules 14 days notice must be given.For a committee meeting to take place, a quorum must be present. The rules of your sporting club should specify the number of committee members that constitutes a quorum. Under the rules, more than half the total number of committee members comprise a quorum for a committee meeting.The format of the meeting is at the discretion of your club, however the President should chair any committee meeting they attend. If the President cannot attend, any other member can be nominated to chair.The management committee may permit a committee member to take part in a committee meeting by using any technology that reasonably allows the member to hear and take part in discussions as they happen.Minutes must be kept of all management committee meetings.
General meetings can be held at any time and the frequency will depend on the activities of your sporting club. General meetings can be called at any time in accordance with the rules.
The model rules allow the Secretary to call a general meeting by giving each member notice of the meeting in accordance with the rules.
The Secretary may also call a general meeting after:
• Being directed to call the meeting by the management committee
• Being given a written request signed by at least a third of management committee members
• Being given a written request signed by twice as many ordinary members as the number of members on the management committee, plus one.
The rules of your sporting club must specify:
• The manner of calling general meetings
• The quorum for general meetings
• The procedure at general meetings
• Whether members are entitled to vote by proxy at general meetings and by what method
• The time and the manner in which notices of general meetings are to be given
• The time and the manner in which notices of motions are to be given, published or circulated
For a general meeting to take place, a quorum must be present. A quorum for a general meeting of a club is at least the number of management committee members, plus one. However, if all members of your club are members of the management committee, a quorum is the total number of members, less one.
No business is to be transacted at any meeting unless a quorum is present. The rules of your club should specify the procedure if a quorum is not present at a meeting.
The format of your club’s general meetings will vary depending on the type of business that needs to be addressed.
Minutes must be kept of all general meetings.
Annual General Meetings
The AGM is attended by the management committee, members and invited guests. This meeting is a statement to members about your sporting club’s financial position and the activities and achievements of the previous year. The AGM is an opportunity for your club to officially elect office bearers and to present audited or verified financial statements to your members.
AGMs must be held within six months after the end of the club’s financial year.
The rules of your club must specify the way the meeting is called and the way the notice of the AGM is to be given. Under the rules, the Secretary must give notice to each member specifying the place, date and time of the meeting and the nature of the business, including the fact that it is the AGM. The notice must be given at least 14 days before the meeting.
Written notice of any proposed special resolution must also be given to members as required under the rules. The rules require at least 14 days notice of a general meeting. For convenience, the notice of meeting and any notice of special resolutions can be sent to members together.
The rules of your club must include what business is to be covered at the AGM. Under the rules, the following business must be conducted:
• Receiving the statement of income and expenditure, assets, liabilities and mortgages, charges and securities affecting the property of your incorporated association for the last financial year
• Receiving the auditor’s or verifier’s report on the financial affairs of the incorporated association for the last financial year
• Presenting the audited or verified financial statements to the meeting for adoption
• Electing members of the management committee
• Appointing an auditor or verifier.
The format of the meeting will be similar to that of a general meeting, however the previous minutes will be from the previous AGM, not the previous general meeting. The minutes kept must state specifically that they are minutes of the AGM.
Minutes must be kept of all Annual General Meetings.
The Chairperson of any meeting is responsible for supervising and administering the voting. It is recommended voting be carried out by show of hands or balloting.
The rules allow voting in person, by proxy, by attorney or by using any technology that allows the member to hear and take part in discussions as they happen.
The format and process for postal voting is at the discretion of your club and should be set out in the rules.
A ‘special resolution’ is a resolution that is passed at a general meeting (including the AGM) of a sporting club by the votes of 75 per cent of the members who are present and entitled to vote.
Matters that must be decided by special resolution are:
• A change of name for the sporting club
• A change to the club’s rules
• The decision to wind up the club
Postal voting is not allowed for special resolutions.
The rules of your sporting club should set out the manner in which notice of motions is to be given. A member who wishes to bring any business before a general meeting should give notice to the club as per the rules. Members should ensure that they raise their agenda item in sufficient time for it to be included in the notice calling the next general meeting.
Your sporting club must record minutes at all meetings, including management committee meetings, general meetings and the AGM.
If asked by a member of your club, the Secretary must within 28 days, make the minute book for a particular general meeting available for inspection by the member at a mutually agreed time and place. The Secretary must also give the member copies of the meeting minutes. Your club can ask the member to pay the reasonable costs of providing copies of the minutes.
The Secretary is ultimately responsible for ensuring your club’s minutes are maintained accurately. The minutes of meetings provide a permanent official record of the business transacted. They should form a clear and concise summary of the proceedings of the meeting.
The minutes would normally include:
• Details of the day, date and place of the meeting and the time of commencement
• The names of those present and details of any apologies received
• That the Chairperson announced a quorum was present and that the meeting was duly constituted
• A reference to minutes of the previous general meeting and the signing of them as a correct record
• Details of every resolution put to members and whether it was passed with the required majority
• Details of members voting against a motion or abstaining from voting, if those members request that this be recorded
• Details of any appointments made, members elected to office and any leave of absence granted to a member
• Details of election of committee members (if applicable)
• Overview of discussions concerning decisions made at the meeting
• Decisions made at management committee meetings
• The date and time for the next meeting, if this is determined during the meeting
• The time that the meeting closed
Committee members of associations are required to take all reasonable steps to ensure that their association complies with all of these obligations.
The rules require a sporting club to appoint its auditor or verifier for the present financial year at the annual general meeting.For a club not required to have an audit, the verifier is the President or Treasurer.
You will need to provide your auditor or verifier with:
• Cash receipts
• Register of receipt books
• Receipt books containing duplicates of issued receipts
• Unused receipt books
• Duplicate bank deposit slips
• Cash receipts journal
• Cash payments
• Vouchers for payments made in chronological order
• Cheque butts (used, unused and cancelled)
• Cash payments journal
• Cash at bank
• Ledger account (if applicable)
• Bank statements for the year, plus one month before and one month after
• Bank reconciliations for financial year, and from the previous financial year
• Petty cash
• Petty cash vouchers
• Petty cash summary
• Depreciable assets
• Register of all non-current assets including any additions or disposals that occurred during the financial year
• Documentation supporting disposals
• Accounts receivable
• List of all amounts due at end of financial year
• Indication of number of days account has been outstanding and when payment is expected
• List of all amounts owing at end of financial year
• List of loans payable, to banks or otherwise, including interest rates, principal outstanding and repayments
• Minute books
• A copy of your sporting club’s rules
• Register of members
• Any other documentation the auditor or verifier requests
- Annual Returns
Your sporting club must prepare an annual return. The management committee must ensure financial statements are prepared and presented to the AGM for adoption.Within one month of the AGM, your club must complete and lodge Associations Incorporation form 12— Annual return of association. You will be sent this form within one month of your club’s financial year ending. Lodgement details and fees are included on the form.The annual return must include a copy of the financial statement presented at the AGM, signed and dated by either the President or the Treasurer, including:
• A profit and loss statement (income and expenditure)
• A balance sheet (assets and liabilities)
• Details of all mortgages, charges and securities that affect any of your club’s property at the close of the financial yearThe annual return must also include a copy of the signed audit report or verification statement.
- Record Keeping
Financial recording requirements for your sporting club include keeping:
• A cash book or statement of amounts received and paid
• A receipt book of receipt forms
• All club bank statements
• A register of assets
• A petty cash bookLarger sporting clubs may also be required to use a journal and/or ledger. This depends on the type of financial operations your club requires. If you are unsure, contact your auditor or verifier for more information.All financial records for your club must be kept for at least seven years after the final entry.
- Bank statements and petty cash book
Your sporting club must hold an account with a financial institution in Queensland.The management committee must be recorded in meeting minutes as either approving or ratifying all payments. Therefore, any invoices that need to be paid must be raised by the Treasurer at a management committee meeting for approval.Any payment over $100 must be paid by cheque or electronic funds transfer. Any amount less than this can be paid from your club’s petty cash. All payments from petty cash must be recorded in the petty cash book.All cheques must feature two signatures, with at least one being an office bearer.