Associations Incorporations Bill 2006

In November last year, DOCEP released a Consultation Guide seeking comments on the Draft Associations Incorporations Bill 2006. The Executive Summary that identifies all the major proposed legislative changes is reproduced below. The full Consultation Guide and the Draft legislation can be downloaded from the DOCEP

website. Submissions must be in writing and reach DOCEP by 5.00 pm on Monday 30 April.

Vice-president, John Robertson is currently compiling CAWA’s submission.

Executive Summary

1.1 Introduction

The Government of Western Australian supports the underlying function and
philosophy of the Associations Incorporation Act 1987 (“the Act”), which provides a framework of regulation for incorporated associations while leaving the internal management of associations largely to the members.

The Act applies to incorporated associations that have a lawful, non-commercial purpose and do not distribute profits to members. The essential purpose of the Act is to permit associations of individuals to incorporate and create a separate legal entity that can enter into contracts, hold property and sue or be sued when such circumstances arise.

A review of the Act has been undertaken following a long period of consultation with representatives from both incorporated and unincorporated associations, other key stakeholders and the general community. There is broad agreement that the Act has a number of deficiencies that need to be addressed to overcome legal uncertainties and administrative inefficiencies. The Associations Incorporation Bill 2006 (“the Green Bill”) has been released for public comment so that the detail of proposed amendments can be openly discussed and considered by the people that it will affect the most.

The Government aims to introduce amendments to the Act that will realign it with contemporary legislation in other Australian jurisdictions. The proposed amendments aim to streamline the regulation of associations in order to promote efficiency and greater accountability, while minimising administration and compliance costs for associations.

 1.2 Key Changes

The proposed amendments to the Act are designed to achieve a balance between the need for reasonable regulation and the desire for incorporated associations to be able to function autonomously and effectively. The key changes are summarised below.

1.2.1 The incorporation process
The incorporation process will be streamlined and improved by:

  • removing the specific eligibility criteria in relation to the purpose or
    objects of an association;
  • no longer requiring that all applications for incorporation be advertised;
  • and requiring that an application for incorporation show that the association concerned has at least six members who have full and equal voting rights.

1.2.2 Rules of associations

The role and content of associations’ rules will be clarified by:

  • prescribing in the regulations a set of model rules that will automatically apply to all newly incorporated associations;
  • making the rules of an association a contract between members and enforceable as such;
  • requiring an internal dispute resolution process to be included in the rules;
  • allowing members to refer unresolved disputes to the State Administrative Tribunal for determination;
  • prescribing a limitation on the number of members that under the rules may call a general meeting; and
  • requiring that the rules identify who is to receive surplus property on a winding up.

1.2.3 Management and accountability

The management of associations will be improved by:

  • obliging an association to appoint a member of its management committee to be its public officer to function as a point of contact with the Commissioner for Consumer Protection (“the Commissioner”);
  • providing a clearer definition of “special resolution”;
  • requiring associations to lodge an annual return with the Commissioner setting          out their financial position;
  • having audit requirements that will differ depending on the extent of the financial activities and property of an association – a three tiered system of financial accountability is proposed;
  • permitting associations to require members seeking access to the member’s register to demonstrate that such access is for association business only; and
  • allowing associations to amalgamate.

1.2.4 Powers of the Commissioner for Consumer Protection

The powers of the Commissioner will be broadened in relation to:

  • allowing associations the power to direct an association to call a general meeting of member where the members are in dispute;
  • the power to change the name of an association if it is inappropriate;
  • the appointment of a statutory manager to administer the affairs of an incorporated association in certain circumstances, so long as it is in the public interest to make such an appointment;
  • the power to direct (or authorise) a large or complex association, or one that has ceased to be eligible for incorporation, to apply for incorporation under more appropriate legislation;
  • the power to direct an association to transfer its undertaking to some other appropriate body corporate in certain circumstances;
  • the appointment of a qualified person to carry out a special audit of an association’s financial affairs; and the power necessary for the carrying out of investigations including the power to obtain a search warrant.

1.2.5 Voluntary winding up and cancellation of incorporation

New procedures and controls will be enacted to enable:

  • an association to be wound up voluntarily if it has surplus property to be distributed;
  • local government authorities to be the recipient of surplus property;
  • the incorporation of an association to be cancelled at its request if it has no liabilities and there is no surplus property to be distributed; and
  • a requirement to document the specific day on which the Commissioner cancels the incorporation of an association.

1.2.6 Miscellaneous changes

These include:

  • provision that the legal principle known as ‘the doctrine of constructive
  • notice’ does not apply to the documents of associations that are lodged
  • with the Commissioner;
  • extending of the period within which proceedings for an alleged offence
  • against the Act may be commenced, from one year to three years;
  • increasing the penalties for a breach or contravention of the Act to
  • better protect the interests of members or associations; and
  • the power to enforce obligations under the Act by the issue of
  • infringement notices.
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