The Associations Incorporation Act – Tasmania 1964 is an act of the parliament of Tasmania that gives an association or community groups certain legal advantages in return for accepting certain legal responsibilities. An incorporated association receives recognition as a legal entity separate from its members and offers some protection for office holders from any debts or liabilities incurred by the group as long as the association doesn’t make a profit for its members.
The Office of Consumer Affairs & Fair Trading undertakes the administration of the Associations Incorporation Act 1964 on behalf of the Corporate Affairs Commission.
To be incorporated An association is eligible for incorporation if it has:
- More than 5 members and is formed
- For a religious, educational, charitable or benevolent purpose
- For the purpose of promoting or encouraging literature, science or the arts
- For the purpose of sport, recreation or amusement
- For the purpose of establishing, carrying on, or improving a community, social or cultural centre, or promoting the interests of a local community
- For political purposes
- For any other purpose approved by the Commissioner
Why become Incorporated?
Incorporation refers to the process of making your club a legal association, so that it is recognised by law as having existence in its own name. Whilst there is no legal necessity for a sport or recreation organisation to become incorporated if it remains a voluntary organisation, incorporation is recommended because it allows an organisation to:
- Have its own ‘corporate’ identity
- Protect individual members of club from legal liability
- Enter into enforceable contracts
- Purchase and own real estate
- Enter into tenancy and lease agreements
- Sue or be sued
- Accept bequests or gifts
- Apply for government grants
- Continually exist until it is disbanded by direct operation of the law
Please note Associations Incorporations legislation is governed at the state rather than federal level, therefore requirements vary between states. Office of Consumer Affairs & Fair Trading is the organisation responsible for incorporated associations in Tasmania. The Office of Consumer Affairs & 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 Consumer Affairs & Fair Trading P: 1300 65 44 99 W: www.consumer.tas.gov.au
Why you wouldn’t become Incorporated?
There are reasons why clubs choose not to be incorporated. These include:
- Ease of dissolution as there are no statutory obligations
- Privacy of affairs as accounts and financial statements are not subject to public scrutiny
- An unincorporated association which ‘carries on business’ in other States of Territories does not encounter company registration problems as does an incorporated association
- It is not necessary to appoint a public officer
- It may be difficult to sue people in relation to a wrong committed by an unincorporated association
The major benefits for clubs incorporating under the Act include:
- Having club members protected, to a certain extent, from being sued individually if someone is injured while involved in activities run by your club
- Improving your club’s fundraising ability and eligibility for grants (many local councils insist on it before allocating funds)
- Making it easier to enter into leases, to open and operate bank accounts and to borrow money
The challenges include complying with the costs, requirements and ongoing obligations of being an incorporated club. These take time and mean that people involved in the club need to be willing to take on certain tasks such as organising meetings and keeping proper financial records. It also means that certain information about your club will or may become publicly available (for example, the names of certain office holders in the club, some financial information and the rules of the club).
Roles and Responsibilities for club
- Management Committee
Management of the club shall be vested in the Management Committee elected by the members at the Annual General Meeting and consisting of:
• Committee members (number to be nominated)
• Club or team delegates – No person shall hold more than one position on the Management Committee at any one time. A person shall cease to be a member of the Management Committee at the conclusion of the Annual General Meeting next following his/her election and he will be eligible for re-election.The Management Committee shall carry out the day-to-day running of the club and shall have the power to:
• Administer the finances, appoint bankers, and direct the opening of banking accounts for specific purposes and to transfer funds from one account to another, and to close any such account
• Fix the manner in which such banking accounts shall be operated upon, providing all payments are passed by the Management Committee
• Fix fees and subscriptions payable by members and decide such levies, fines and charges as is deemed necessary and advisable, and to enforce payment thereof
• Adjudicate on all matters brought before it that in any way affect the club
• Cause minutes to be made of all proceedings at meetings of the Committee and General Meetings of members
• Make, amend and rescind rulings and by-laws
• Have the power to form and appoint any sub committee/s as required for specific purposes
• May at their discretion employ a person or persons to carry out certain duties required by the club at salaries or remunerations for such period of time, as may be deemed necessary
• Should a vacancy occur on the Management Committee during the season, the Management Committee shall appoint a successor until the next Annual General Meeting
• Appoint an officer/s or agent of the Management Committee to have custody of the club’s records, documents and securities
- Public Officer
Every Incorporated club is required to have a Public Officer who must be 18 years of age or older and a resident of Tasmania. The principal role of the Public Officer is that of an official of the Group on whom notice is required to be served in the legal sense.
For example, a summons to appear in court has to be served on the Public Officer. The Public Officer must keep the Business Affairs Commission informed of constitutional changes in the Association and its financial situation. Unless the rules of your Group says otherwise, your committee is free to select whoever they think is best for the job – whether it be a committee member, a member of your Group or even an outsider. If the Public Officer changes address, a form notifying this change must be lodged at the Commission within 14 days. It is also the Public Officer’s duty to notify the Commission of any changes in the Committee within 14 days of the change.
- Audits and Annual Returns
Incorporated clubs must have their financial affairs audited at least once per year by a person who is a registered company auditor or who is approved by the Business Affairs Commission to conduct the audit. It is important to remember to keep all supporting receipts, invoices and other documentation. Groups can try and get an exemption from auditing simply by writing Business Affairs Branch a letter, however an exemption has never been granted.The auditor cannot be:
• The public officer or a committee member of the club
• A servant of the club
• A partner, employee or employer of the public officer or a committee memberThe auditor will require supporting documentation for the transactions during the year.
Contact your auditor well in advance of the end of the financial year to arrange a mutually convenient time for the audit to be performed. Annual Returns
Incorporated clubs have to lodge an annual return to the Consumer Affairs and Fair Trading within 6 months of the close of the financial year of the club. Your group may nominate any date to start its 12 month financial year. An audit is not required until the club has completed its first full financial year as an incorporated body; the audited return then needs to be lodged within six months of this financial year. A $50.00 fee has to be paid when the return is lodged. Late fees may also be payable if the return is lodged more than 6 months after the end of the financial year of the club.The Annual Return should include:
• The name and registered number of the club
• The date of the last AGM
• The date on which the last financial year of the club ended
• A report on the accounts of the club stating whether the club has in the opinion of the auditor kept proper accounting records and other books during the period covered by those accounts
• Such statements that are adequate to explain your group’s financial transactions for that financial year
• A list, signed by the auditor, of the names and residential addresses of the committee for that financial year.
At the end of the financial year, a summary of receipts and expenditure (by type) should be prepared. The difference between receipts and expenditure will give rise to a surplus or deficit. The accounts should be presented to the auditor, who will advise on the appropriateness of the format. The accounts and auditor’s reports thereon shall be lodged with the Commissioner within six months of the end of the financial year. The lodgement fee should accompany this return. Also required to be lodged with the accounts and auditor’s report is a list of Committee members and their residential addresses. This list must be signed by the auditor.There should be a separate bank account in the name of the incorporated entity. There should be two signatories to the bank account. The signatories would normally be any combination of the Secretary, Treasurer or President. Bank interest and bank fees will be earned / incurred without receipts or cheques being written. When the statements are received, these amounts should be written up in the cash book in a similar fashion to receipts and cheques. It should be possible to reconcile the movements in the bank account balance to the receipts and payments recorded in the cash book. This is a good check on the accurate recording of receipts and payments and should be done regularly, depending on the volume of transactions. At the very least, it should be performed at the end of the financial year, but it is recommended to be done monthly, or when bank statements are received.
Pre-numbered duplicate books should be obtained. Receipts should be written for all receipts of cash and cheques and the original issued where possible. The duplicate should be retained for internal record keeping purposes. (All copies of cancelled receipts should be retained.) Receipts should be banked promptly and intact. A cash book should be purchased. Periodically (at least monthly), all receipts should be written up in the cash book and summarised. They should be classified by their type, for example, grants received should be classified separately from other receipts. The receipt number for each receipt should be recorded in the cash book. It should be possible to account for the numerical sequence of receipts. All receipt books should be retained for audit purposes. Also, if there is supporting documentation relating to a receipt, this should also be retained for audit purposes (for example, a letter accompanying a grant cheque).
Cheque books should be used for all payments. The cheque butt should record the details of:
• Date of payment
• Payee name
• Description of payment (for example, lodgement fees)
• The cheque number should be written in the cash book in numerical order and the cash book should account for all cheques
The Annual General Meeting of the Association must be held within four months of the end of the club’s financial year. The Secretary shall give at least fourteen (14) days notice of the date of the Annual General Meeting to members. All financial members may attend the Annual General Meeting.
The agenda for an Annual General Meeting shall be:
• Opening of meeting
• Confirmation of minutes of previous Annual General Meeting
• Presentation of Annual Report
• Adoption of Annual Report
• Presentation of Treasurer’s statement
• Election of New Executive and appointment of Auditor
• Vote of Thanks to outgoing Executive
• Determination of Annual Membership Fee
• Notice/s of Motion
• Urgent general business
• ClosureGeneral Meetings
General meetings may be called by the Management Committee or at the request of the President and Secretary or on the written request of members of the club. The Secretary shall give at least seven (7) days notice, in writing, of the date of the General Meeting to the members. Notice of General Meetings shall set out clearly the business for which the meeting has been called. No other business shall be dealt with at that General Meeting.Minutes of Meetings
Minutes should be kept of all meetings. These should be signed as a true record of the meeting when tabled at the next meeting. It is recommended all cheque payments should be recorded in the minutes (a list of the cheques for that meeting should be included in the minutes or as an attachment).
The management of a club is in the hands of an executive committee, which is responsible for the administration of the affairs of the club in accordance with the Act and the rules of the club. It is not a function of the Office of Consumer Affairs and Fair Trading to offer legal advice or to intervene in the internal affairs of incorporated associations that involve members’ disputes.The Office of Consumer Affairs and Fair Trading does not have the authority under the Act to investigate for to intervene in any of the following matters:
• Disputes relating to a breach of the club’s rules
• Disputes between a member and another member or a member and the club
• Disputes relating to the mishandling of funds. Such issues should be reported to Tasmania Police
• Disputes involving the conduct of a general meeting or the process by which members of the committee are elected
• The validity of the appointment or of the removal of a public officerThe Office of Consumer Affairs & Fair Trading can intervene when complaints relate to a breach of the provision of the Act. These may include:
• Failure to ensure proper accounting and other records are kept by the association (section 23a)
• Failure to appoint a public officer or to change details of a public officer (section 14)
• Failure to lodge rule changes (section 28)Written reports of suspected breaches of the Act should be made to Consumer Affairs and should include:
• The name of the club and its incorporation number
• The names of the persons suspected of wrongdoing
• Full details of the misconduct including the actions, dates and places in sequential order
• If known, the provisions of the Act that is relevant
• Any relevant documentation that may be used as evidence, such as letters or minutes.
• The names and addresses of the persons who may have witnessed or have information concerning the suspected breach or activity
• Reference to any other authority that has been approached, eg, the Tasmanian Police. If the person has been convicted of an offence in relation to the matter as a result of police intervention, include any relevant documentary materialIf a dispute arises between a member and a club, attempts should be made to resolve the dispute directly between the parties. The dispute resolution mechanism within the rules adopted by the club should be used. If the club’s rules do not include a dispute resolution, section 34 of the model rule provides for disputes. If the matter remains unresolved, members may wish to seek independent legal advice or to use a professional mediation service.Free legal advice can be attained through the Legal Aid Commissioner on 1300 366 611.
http://www.consumer.tas.gov.au/registrations/incorporated_associations http://www.development.tas.gov.au/__data/assets/pdf_file/0004/39199/Incorporation.pdf http://www.development.tas.gov.au/__data/assets/pdf_file/0004/39190/Constitutions.pdf http://www.development.tas.gov.au/__data/assets/pdf_file/0011/39188/Committee_Management.pdf