Changes to incorporated association law have recently come into force in Western Australia.
An incorporated association is a popular way of setting up a sports club, charity or social group in Western Australia. They can usually be identified by the use of “Incorporated” or “Inc” in their name.
Some 17,000 of these now exist. They range in size from a few members, to large organisations like the RAC of WA.
There are many benefits. For example, assets can be owned by the entity in its own name. Office holders are protected.
However, it has not always been smooth sailing.
Significant changes to the law came into effect on July 1 2016. These are designed to promote good governance and simplify management. There has also been an attempt to provide consumer protection without making the burden on small clubs too large.
The new law confirms that an association’s rules are a binding contract. Every new member must get a copy of the rules upon joining.
Office holders are now subject to new requirements. There is now a duty of good faith. They must not act for an improper purpose. They must disclose their interests. They cannot act if they are bankrupt or have been convicted of serious offences within five years.
There are also duties to protect privacy. There are limits on how the member register can be used. Office holders must return records when they leave office.
Substantial new financial reporting duties have been introduced. The level of reporting will depend on the turnover of the association.
A dispute resolution process must be in the rules. The member can apply to the State Administrative Tribunal for help if the dispute cannot be resolved in-house.
Amending the rules
Existing associations have three years to amend their rules. Committees can make rule changes without a special resolution for changes that comply with the new law.
An address for service must also be given to the Department of Commerce within 90 days.