Associations Incorporation Act 2015 … PRESENTERS: Melissa Rosair-Everingham Department of Commerce Kylie Hansen WACOSS Written by: Melissa Rosair-Everingham

Department of Commerce OVERVIEW Introduction Summary of key features Some frequently asked questions Resources available to assist associations –Department of Commerce –WACOSS Questions

Department of Commerce INTRODUCTION The nature of associations and the environment in which they operate has changed considerably since 1987 Many associations generate significant revenue and engage in trade Community expectations about accountability and governance have changed Associations Incorporation Act 2015 replaces the Associations Incorporation Act 1987 Royal assent on 2 November 2015 (planned to commence 1 July 2016)

Department of Commerce ELIGIBILITY FOR INCORPORATION Removal of the restriction on trading Makes it easier for associations to operate Still need to be formed and carried on for one or more eligible purposes in section 4 Cannot secure pecuniary profit for members Eligibility centres on the NFP character of associations Safeguards e.g. Commissioner can direct a transfer of incorporation

Department of Commerce FINANCIAL REPORTING Reporting to members based on revenue: –Tier 1: <$250K (basic financial statements, cash/accrual) –Tier 2: $250K – <$1M (financial report; reviewed) –Tier 3: >=$1M (financial report, audited) Greater accountability by larger associations Little change for tier 1 associations, being majority of associations Tiers 2 and 3 – financial reports i.e. financial statements and notes (AASBs) and management committee declaration Qualifications of reviewers & auditor – regulations

Department of Commerce RULES Associations can use the Model Rules or their own Model rules simplify the process for incorporation – can be adopted with minimal additional information required Rules must contain all 19 items in Schedule 1 –new items e.g. financial year, dispute resolution and distribution of surplus property Associations have 3 years from commencement to amend their rules During 3 year transition period, committee may pass changes that simply give effect to a requirement of the Act at a meeting (without a GM), thereafter special resolution at GM Other changes as per usual process

Department of Commerce THE MANAGEMENT COMMITTEE Certain persons not to be members of management committee –undischarged bankrupt or affairs under insolvency laws –offences: promotion, formation or management of body corporate, fraud or dishonesty, breaches of duty under the Act –Not speeding fines! Minimises risk but without unduly limiting pool of suitable persons Applies for a limited time Commissioner can grant leave to act

Department of Commerce THE MANAGEMENT COMMITTEE Duties – “officers” (New definition of “officer”) –Care and diligence (business judgment defence) –In good faith in the best interests and for a proper purpose –Improper use of position –Improper use of information –Defence: reliance Duty – “management committee” –Insolvent trading, defences Material personal interests (see Q2)

Department of Commerce THINGS THAT ASSOCIATIONS SHOULD DO Provide the Department with your current address by 29 September 2016 Check eligibility of committee members Give new members a copy of the rules when they join e.g. electronically Identify whether your association is a tier 1, 2 or 3 and prepare accounts accordingly Start considering what changes to your rules are required Familiarise yourself with other changes that might apply at points in time e.g. amalgamation, simplified winding up

Department of Commerce FREQUENTLY ASKED QUESTION 1. We are thinking of using the Model Rules but adapting it to meet the association’s needs. Can we do this?

Department of Commerce Q1: ADAPTING THE MODEL RULES Associations can adapt the model rules to suit their needs It will no longer be deemed to have adopted the model rules Check that all of the Schedule 1 items have been included See Change of rules checklist

Department of Commerce FREQUENTLY ASKED QUESTION 2. What is considered to be a ‘material’ personal interest that I need to declare as a committee member?

Department of Commerce Q2: MATERIAL PERSONAL INTEREST Material personal interests are not defined in the Act, but depend on the circumstances "a relationship of some real substance to the subject matter under consideration or the contract or arrangement which is proposed“: McGellin v Mount King Mining What is the “personal interest”? (Note: Not interests shared with substantial proportion of, or all, members) –Current and previous paid or volunteer work –Other committee/board memberships –Memberships of other organisations –Ownership of a business or a share in the business –Interests of family or friends Is it “material”? i.e. can it influence the vote of the committee member. –Nature of the interest is irrelevant i.e. direct, indirect, contingent or contractual

Department of Commerce FREQUENTLY ASKED QUESTION 3. Do financial records and statements needs to be kept in a particular format?

Department of Commerce Q3: FINANCIAL RECORDS AND STATEMENTS An association can keep its financial records in any form, provided that they: –correctly record and explain the transactions and financial position and performance –enable true and fair financial statements to be prepared in accordance with the Act Tier 2 and tier 3 financial statements – influenced by accounting standards

Department of Commerce FREQUENTLY ASKED QUESTION 4. What kind of information will associations need to include in the annual information statement provided to the Department?

Department of Commerce Q4: ANNUAL INFORMATION STATEMENT Regulations will require basic information to be provided to the Department: –Confirmation of current address of association and address for service (if different); –Confirmation that the association has at least six voting members; –Date on which the last AGM was held; and –revenue of the association for the last financial year Can do electronically through AssociationsOnline

Department of Commerce QUESTION – WACOSS LEARNING TOOL 5. Bill is a long-time volunteer and member of Save the Trees Incorporated. He wants to send an to all the members of the association about a petition to encourage people to adopt pets from shelters. Can Genevieve, the secretary, provide details of the membership for him to be able to do this?

Department of Commerce USE OF MEMBERS’ REGISTER Generally, members can inspect the register and make a copy/extract BUT use of register must be connected with the association’s affairs –Genevieve would need to be satisfied that Bill’s use of the register is connected with the association’s affairs – Saving trees not pets?; or –Otherwise authorised by the association e.g. rules, committee Associations can require (via rules) a stat dec stating purpose and declaration that will be used for purpose connected with the association’s affairs Penalties for misuse of register e.g. advertising for political, charitable, religious or commercial purposes –Exception: approved by association

Department of Commerce RESOURCES – DEPARTMENT OF COMMERCE Transition pack Associations newsletter Online resources Information sessions  :  :  :

Department of Commerce RESOURCES – WACOSS & OTHER WACOSS ‘Testing your Associations Knowledge’ learning tool Linkwest Law Access – pro bono legal advice for NFPs and individuals

Department of Commerce THANK YOU