Victorian Incorporation Reform Act 2012

Most community local sporting clubs are established as incorporated associations.  In Victoria, incorporated associations are governed under the Associated Incorporations Reform Act 2012.

Consumer Affairs Victoria (CAV) oversees the Associated Incorporations Reform Act 2012 and provides a highly informative website for clubs who have registered or considering registering as an incorporated association.  The CAV can be accessed by clicking on the following link:

http://www.consumer.vic.gov.au/clubs-and-not-for-profits

The Associated Incorporations Reform Act 2012 provides registered clubs and associations with guidance and direction on the following topics:

  • Forming an incorporated association
  • Information to be included in incorporated association rules
  • Amalgamating two 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 Consumer Affairs Victoria or seek advice specific to the needs of your club when considering its obligations under the Associations Incorporation Reform Act 2012.

Naming conventions and requirements

The name of the club (incorporated association) must have the word “Incorporated” as the last word of its name.

For example

Mt. Martha Cricket Club Incorporated or Mt Martha Cricket Club (Incorporated)

Clubs must ensure that its full name and registration number (which is issued by CAV) 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

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

The club secretary must notify the CAV Registrar within 28 days of the meeting in which the special resolution to change the club name was passed.

Clubs must notify CAV using the correct form provided on the CAV website which can be accessed by clicking the following web link

http://www.consumer.vic.gov.au/clubs-and-not-for-profits/incorporated-associations/update-details

If clubs fail to notify CAV of their name change within 28 days in the prescribed, 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 CAV website by clicking the following web link:

http://www.consumer.vic.gov.au/clubs-and-not-for-profits/incorporated-associations/running-an-incorporated-association/rules#model-rules

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

If a club chooses to adopt the Model , they come into effect as soon as the committee vote to adopt the Model Rules and does not need the approval of the CAV.

Regardless of whether 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 purpose of the club
  3. Membership qualification rules and any fees to be paid by members
  4. The rights, obligations and liabilities of members
  5. Provisions for the cessation of membership or resignation of members
  6. Disciplinary procedures
  7. Dispute resolution procedures
  8. The name, membership and powers of the committee
  9. Process for electing committee members
  10. Term of office of committee members
  11. Processes for filling casual vacancies on the committee
  12. 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
  13. 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
  14. The time within which notices of general meetings and notices of motion must be given, published or circulated
  15. Procedures for the appointment and removal of the club secretary
  16. How custody of club records are going to be maintained
  17. How the club common seal (if any) is used
  18. Procedures for allowing members access to the business records of the club
  19. Sources of club revenue and procedures for managing these funds, in particular, processes for drawing and signing cheques and paying expenses
  20. Procedures that alter the rules of the club, including rescinding and adding new rules
  21. How club assets are to be treated upon winding up or dissolution of the club and how surplus assets are to be distributed

Grievance procedures

The rules of the club must set out the grievance procedure for dealing with disputes under the rules between:

  • A member and another member
  • A member and the club

A person may appoint a person to act on their behalf throughout the procedure.

The club must ensure each party in the dispute has had an opportunity to be heard and that the outcome of the dispute is determined by an unbiased decision maker.

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)
  • At the meeting a special resolution is voted on by members and is passed if 75% of members (as allowed to vote by the Club Rules) vote in favour of the change.

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

http://www.consumer.vic.gov.au/clubs-and-not-for-profits/incorporated-associations/running-an-incorporated-association/rules

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

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

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

  • The person’s name and address
  • Their class or category of membership
  • The date the person became a member
  • The date a person ceased to be a member must be entered into the register within 14 days of cessation.

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 requests to inspect the member’s register they must be given access to inspect the minutes 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 to 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 this must be held within five 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 that 21 days notice from 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 not less than 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
  • Be entitled to vote at a general meeting.

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 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 a 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 CAV of the change of secretary within 14 days of appointment.  Failure to do so may result in the club being fined.

Clubs must notify CAV of the change of secretary using the correct form provided on the CAV website which can be accessed by clicking the following web link

http://www.consumer.vic.gov.au/clubs-and-not-for-profits/incorporated-associations/update-details

Responsibilities of club office holders

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

  • Member of the committee
  • Secretary
  • Any person who participates in the making of decisions (including club employees)
  • A person who has the ability to effect the financial standing of the club
  • A person who has the ability to ability to influence the committee

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 that they do not have a material personal interest in the subject in question
  • Ensure that 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
  • Not cause detriment to the club

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

Material personal interest (conflict of interest)

Club office holders who have a material personal interest in a matter being considered by the committee, must disclose this personal interest as soon as they become aware of the conflict.  The conflict of interest must also be disclosed at the next general meeting of members.   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 material personal interest

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

Exceptions to these disclosure rules are where the material personal interest exists because the individual is an employee of the club or a category of member that 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 material personal interest must not attend the committee meeting while the matter is being considered or the vote being held.

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

If by excluding the committee member with the material personal 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 28 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 purpose of preparing financial reports, each financial year must fall into one of three tiers.  Each tier, determined by total club revenue, has different reporting requirements.

Tier Definition
1 Total revenue of less than $250,000 (or declared by the CAV)
2 Total revenue > $250,000 and < $1m
3 Total revenue of greater than $1,000,000

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

Clubs must lodge with the CAV a copy of the club’s financial statement within one month after the date of the annual general meeting when the financial statements were submitted to the members.

If the club does not hold an AGM within five months of the end of the financial year (as required by law) the club must notify CAV.

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.

Reporting Requirements – Tier One clubs

As soon as practical after the end of the club’s financial year, the club must prepare financial statements which are a true and fair position of the clubs financial position and performance during the last financial year.

Generally Tier One 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 CAV to have their financial statements reviewed.

The committee must present the previous financial year’s statements to the members at the first annual general meeting after the end of the financial year. The financial statements must:

  • Give a true and fair view of the financial position and performance of the club during the financial year
  • Have two committee members certify on the prescribed form that the statements are a true and fair reflection  prescribed form
  • If required, include a copy of the report of the review of the financial statements

Post AGM Requirements

As soon as practical after the club’s AGM, a committee member must certify, on the approved form, the following:

  • They attended the AGM
  • The financial statements were submitted to the members of the club at the AGM
  • The minutes of the AGM must include a copy of the financial statements and the certification of two committee members stating the statements are a true and fair reflection of the transactions and position of the club at the end of the previous financial year

Reporting Requirements – Tier Two clubs

As soon as practical after the end of the club’s financial year, the club must prepare financial statements in accordance with the Australian Accounting Statements and deal with all matters prescribed in the regulations.

Statement review

Tier Two 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 that the review was prepared in accordance with the Auditing Standards on Review Engagements and must state whether the financials were kept in a manner which allows the financial statements to be prepared in accordance with Australian Accounting Standards.

AGM Reporting

The committee must present the previous financial year’s statements to the members at the first annual general meeting after the end of the financial year. The financial statements must:

  • Give a true and fair view of the financial position and performance of the club during the financial year
  • Have two committee members certify on the prescribed form that the statements are a true and fair reflection  prescribed form
  • Be accompanied by a copy of the report of the review of the financial statements

Post AGM Requirements

As soon as practical after the club’s AGM, a committee member must certify, on the approved form, the following:

  • They attended the AGM
  • The financial statements were submitted to the members of the club at the AGM

The minutes of the AGM must include a copy of the financial statements, the report of the review of financial statements and the certification of two committee members stating the statements are a true and fair reflection of the transactions and position of the club at the end of the previous financial year.

Reporting Requirements – Tier Three clubs

As soon as practical after the end of the club’s financial year, the club must prepare financial statements in accordance with the Australian Accounting Statements and deal with all matters prescribed in the regulations.

Statement review

Tier Three clubs must have their financial statements reviewed by an independent person who is:

  • Registered company auditor
  • A firm of registered company auditors
  • A member of and holds a current practising certificate from CPA Australia, The Institute of Chartered Accountants or 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 the financials were kept in a manner which allows the financial statements to be prepared in accordance with Australian Accounting Standards.

AGM Reporting

The committee must present the previous financial year’s statements to the members at the first annual general meeting after the end of the financial year. The financial statements must:

  • Give a true and fair view of the financial position and performance of the club during the financial year
  • Have two committee members certify on the prescribed form that the statements are a true and fair reflection  prescribed form
  • Be accompanied by a copy of the report of the audit of the financial statements

Post AGM Requirements

As soon as practical after the club’s AGM a committee member must certify, on the approved form, the following:

  • They attended the AGM
  • The financial statements were submitted to the members of the club at the AGM

The minutes of the AGM must include a copy of the financial statements, the report of the audit of financial statements and the certification of two committee members stating the statements are a true and fair reflection of the transactions and position of the club at the end of the previous financial year.

 

 

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