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Associations Incorporation Act brought into the 21st Century

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The South Australian Government has recently brought the Associations Incorporation (Miscellaneous) Amendment Bill 2021 (SA) (Bill) before the House of Assembly.

This Bill will bring about the most comprehensive amendments to the Associations Incorporation Act 1985 (SA) (Act) since 1997 and is designed to address issues that have frequently been raised regarding the operation of the Act.

The Bill will bring about important changes to the Act which will require associations to immediately review and amend their rules to ensure compliance with the Act.

For some of these changes (but not all) there will be a grace period of 12 months for ensuring that an association’s rules comply with the amending legislation.

How will the Bill affect existing rules of incorporated associations?

The Bill, should it be passed in its current form, will impose immediate obligations on an incorporated association which will need to be reflected in the association’s rules.

In order to be prepared for these proposed changes, we have outlined the headline changes that an association should be aware of prior to the Bill coming into effect:

  • the addition of ‘model rules’ under proposed section 23B to be prescribed through regulation, though it is not clear at this stage what they entail and whether they will be mandatory, replaceable or merely recommended;
  • the limiting of powers that associations may grant themselves to only those specified in section 25, potentially rendering current powers that go beyond section 25 ineffectual. Many associations will have adopted additional powers, which would now be of no effect;
  • mandating that minutes be created for all association meetings within 4 weeks of the meeting being held and that minutes for general meetings must be provided to members under proposed section 51;
  • requiring that association rules contain provisions addressing internal dispute resolution mechanisms between members and the association under proposed section 23A;
  • requiring  associations to create and maintain a register of all the association’s members under proposed section 39E; and
  • providing for meetings to be conducted through the use of technology and allowing members to participate in and satisfy quorum for meetings conducted remotely under proposed section 50A.

These, among other changes, will come into effect on the date on which the Bill is passed. Incorporated associations should be preparing to review and amend their rules accordingly.

Medium term changes

Certain changes under the Bill will require action within a year of the Bill’s passage to ensure compliance, they include:

  • associations having a minimum of 5 voting members under proposed section 18, with associations having a year to effect any necessary changes.
  • an association having a minimum of 3 members of its governing committee being ordinarily resident in Australia under proposed section 29, with a year-long ‘grace period’ to make any relevant changes to the committee once the Bill is passed; and
  • public officers of associations that operate solely or primarily within a particular jurisdiction notifying the Corporate Affairs Commission (Commission) of this within 6 months of the Bill coming into effect under proposed Item 1 of Schedule 1.

Other changes

Enforcement and compliance

A wide variety of enforcement and compliance powers have been granted to the Commission under the Bill, allowing the Commission to take a far more active role in ensuring compliance with the Act and an association’s rules.

The Commission may, amongst other things, call and chair general meetings on behalf of associations, seize documents and compel individuals to answers questions with respect to suspected breaches of the Act, disqualify individuals from committee membership, issue notices requiring associations to take certain actions and allow a committee to make changes to an association’s rules without requiring a special resolution in specific circumstances.

Ending an Association

Several amendments have been made in the Bill, which are designed to remove the costs and barriers to ending an association.

The process of winding up an association is streamlined under the Bill, removing application fees and increasing the prescribed monetary value of surplus assets that an incorporated association cannot exceed, in order to apply for voluntary deregistration; allowing for any interested individual to apply to wind up an association; and, enabling the Commission to apply to wind up an inactive association without the consent of the Minister.

The Commission may also issue a notice to an association, indicating that it intends to make orders transferring the activities of an incorporated association to another body.