INCORPORATED ASSOCIATIONS

The Public Officer is responsible for keeping the Registrar of Associations (“the Registrar”) informed of any changes to and within the association as required by the law, and for sending the Registrar the annual statement and other required financial information. SEE the “References” portion of this Fact Sheet for information on obtaining copies of legislation. The Public Officer must be at least 18 years old and a resident of Victoria.

The association might also choose to appoint a President, Secretary, Treasurer and so on (the Public Officer may act as both the Public Officer and in another Officer role such as Secretary). Officers have a special duty, which the law treats very seriously, to act in good faith. They must disclose their interests in any contract with the association and cannot take part in decision-making about that contract. They must not knowingly or recklessly make improper use of their position to gain direct or indirect financial or material advantage to themselves (or to the detriment of the association). Officers should also be aware that the Associations Incorporation Act 1981 (Vic) (“the Associations Act”) prescribes various penalties for non-performance of the Act’s requirements.

As a result of changes to the Associations Act the role of ‘public officer’ and the ‘secretary’ will be merged and become simply ‘secretary’.This change is to come into operation on 1/12/2011. This change may require amendment to the rules of existing incorporated associations. 

The Statement of Purposes is a “charter” or “mission” that sets out what the association is aiming to achieve, how it intends to do so and what will be the collective “beliefs” of the association. Any changes to the Statement of Purposes must be submitted to the Registrar for approval within 28 days.

Rules of Association govern the rights and responsibilities of the members as well as how the association will operate. An association may completely adopt the Model Rules provided in the Associations Act, partially adopt the Model Rules, or draft its own rules which must contain the matters specified in the Schedule of the Associations Act. SEE the “References” portion of this Fact Sheet for information on obtaining copies of legislation. Disputes relating to the observance of the Rules are resolved in the Magistrates’ Court.

It is likely that Consumer Affairs Victoria will issue a new set of model rules to include changes to the Associations Act . Existing Incorporated Associations may need to amend their rules accordingly.

Incorporated associations may not be formed to make a profit. This does not mean that an association cannot engage in “business” activities. The Associations Act allows the following activities:

Once an association is incorporated, it must add the word “Incorporated” or “Inc.” to the end of its name; and must display its name and incorporation number on all business documents including letterheads, notices, advertisements and publications. An association must not have, in the opinion of the Registrar, an undesirable name. All incorporated associations must have a registered address (this can be the address of the Public Officer).

Although in Victoria it is not legally necessary for incorporated associations to have a Common Seal, you may wish to have a Common Seal to authenticate association approval of legal documents. A Common Seal is simply a stamp showing the association’s name and incorporated number.

All incorporated associations must hold an Annual General Meeting (AGM). An association’s first AGM may be held within 18 months of incorporation. Subsequent AGMs must be held within five months after the end of the association’s financial year. The following information must be submitted to members at the AGM:

Details of the AGM must be lodged by the Public Officer with the Registrar within one month of the date of the AGM.

Australia must now undertake financial reporting using Australian equivalents of International Financial Reporting Standards (known as AIFRS). Section 296 of the Corporations Act 2001 (Cth) requires disclosing entities to prepare their financial report(s) in accordance with the Australian Accounting Standards Board’s (AASBs) accounting standards. Accordingly, statutory accounts will need to be prepared in accordance with AIFRS for reporting periods. Additionally, financial records must be inspected by an auditor if the association has assets of more than $500,000 or a gross income of over $200,000.

The application for incorporation is made to the Registrar on a form (Form 1), which is available from the Consumer Affairs Victoria website at www.consumer.vic.gov.au, legal stationers or a community legal centre. The form must be accompanied by a statutory declaration certifying the truth of the application and that the applicant is authorised to make the application, the Statement of Purposes, the Rules of Association and any trust deed relating to the association.

As at 1 July 2007, incorporation costs between $55.10 and $110.20 depending on whether the Model Rules are adopted and whether the entity making the application is a company, co-operative or society. The Registrar may refuse to incorporate an association when the type of group appears not to be appropriate as an association.

The Registrar must then send a Certificate of Incorporation that sets out the name of the association and the date of incorporation. Currently this takes approximately two to three weeks.

Associations may voluntarily transfer to another form of incorporated body (such as a co-operative). They may also be directed by the Registrar to register as another form of incorporated body.

An incorporated association may be wound up if the association decides upon a special resolution to do so. An application for winding up can be made by the association, the Registrar or a member or creditor of the association. The general provisions, so far as they are relevant, relating to corporations that wind up voluntarily or involuntarily also apply to associations. Associations may also be compulsorily ended by order of the Supreme Court.