Reforms to legislation governing Incorporated Associations have commenced in NSW

Amendments to the Associations Incorporation Act 2009 commenced on 1 September 2016. The purpose of the amendments is to make it easier for Incorporated Associations to comply with legislative requirements.

One major change is to the Model Constitution, which has been updated to include new rules concerning electronic ballots, use of technology at General Meetings and the distribution of property upon winding up. Changes to existing provisions such as those regarding membership and custody of Association books and records have also been implemented.

The changes have automatically applied from 1 September 2016 to any Association that has adopted the Model Constitution.  A concise summary of all of the changes to the Model Constitution can be found here.

From 1 September 2016, every Association’s Constitution must now address three new matters, being:

1.       The maximum number of consecutive terms that can be held by office-bearers,

2.       Whether ballots can be made by postal or electronic means; and

3.       Processes in relation to the winding-up of the Association.

The duties and liabilities of committee members have now been outlined in the Act, defining those key duties and liabilities that had previously only been found in case law. Those duties include the duty to act with due care and diligence and to carry out functions for the benefit of the Association.

Importantly, the new laws provide committee members with protection from personal liability in circumstances where they have been acting in good faith to undertake their functions under the Act.

Other major changes to the Act include:

1.   Financial records and minutes must be kept in hardcopy and financial records must be kept for five (5) years;

2.     Association names do not need to be reserved prior to registration;

3.     An Association’s official address must be in NSW; and

4.     Changes to NSW Fair Trading’s fee schedule. 

An Association that wishes to update its constitution in light of the amendments will not have to pay the usual fee to register the change for one year commencing 1 September 2016.

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