- New changes to NSW incorporated associations laws take effect on 1 September 2016.
- Many associations may not know what their constitutions comprise or are deemed to comprise. Many others may not know that electronic voting, record-keeping and banking is now provided for in the 2016 model constitution.
- The financial year of many associations, particularly those with a calendar year (or other non-fiscal, 12-month period), may need attention.
As at 30 June 2015, there were more than 36,000 registered associations in NSW. These and any new associations will all soon be affected by new changes to incorporated associations laws, which take effect on 1 September 2016. The changes comprise:
(1) the amendment of the Associations Incorporation Act 2009 by the Incorporation Amendment (Review) Act 2016; and
(2) the replacement of the Associations Incorporation Regulation 2010 by the Associations Incorporation Regulation 2016.
The Associations Incorporation Act 2009 (as amended by the 2016 Act) will be referred to throughout as ‘the Act’. All other acts and regulations will be referred to by date. Because these provisions are new, and in some instances complex and not beyond doubt, this article should not be taken as legal advice but rather as general guidance for further exploration where necessary.
The following important changes have been made by the 2016 Act and Regulation:
- express duty of committee members to exercise due care and diligence but with a good faith defence (ss 30A -30B);
- electronic voting at general meetings is now permitted (ss 38 – 39 and regulation sch 3);
- the accounts, minutes and records of an association can now be kept electronically (r 14);
- these records, however kept, must now be kept for at least five years (r 14);
- all constitutions must now state the maximum number of consecutive terms for office bearers (sch 1 cl 7(b1) of the Act);
- all constitutions must now deal with winding up (sch 1 cl 17 of the Act); and
- fee changes, of which the most important are the reduction of the annual filing fee for the accounts of Tier 2 associations from $54 to $44 and the increase for Tier 1 associations from $54 to $187.
In 2015, Tier 2 associations represented 93 per cent of the associations registered in NSW. Tier 2 associations have gross annual receipts of less than $250,000 and current assets of less than $500,000). Tier 2 associations are not required to have their accounts audited and, after 1 September 2016, should pay substantially less annual filing fees than Tier 1.
This article is based on the assumption that there will be no changes to the Regulation from the consultation draft. In commenting on that draft, the Law Society suggested a number of changes.