Changes to Laws Affecting Incorporated Associations in Western Australia Update


The Associations Incorporations Bill 2014

This is a brief update to our May 2014 briefing paper of the same title.

The Associations Incorporations Bill (the Bill) was introduced into the Western Australian Legislative Assembly on 11 September 2014.  The Bill will repeal and replace the Associations Incorporation Act 1987 (Current Act) and make significant changes to the current laws governing associations in Western Australia. The key changes that Western Australian associations will need to be aware of are briefly set out below. We will provide a more comprehensive analysis of the changes and compliance requirements at a later date.

The key changes

Constitutions to be updated to reflect new requirements

  • Constitutions to provide for circumstances in which payments may be made to a committee member.
  • Constitutions to contain an internal dispute resolution procedure.
  • Constitutions to reflect the new rules relating to the number of members that may request the convening of a general meeting.
  • Constitutions to reflect rules relating to the appointment of a statutory manager.
  • Constitutions to be updated with regard to governance of the management committee.
  • New winding up and amalgamation procedures to be reflected in constitutions.
  • No approval from members is required to update constitutions in line with the new Act, just a notice to members of such changes.

Minimum financial reporting requirements and records

  • Tier 1 (annual revenue of less than $250k) – association to prepare basic financial statements for consideration at each AGM. No independent review or audit requirement.
  • Tier 2 (annual revenue of between $250k and $1m) – association to prepare basic financial statements in accordance with Australian Accounting Standards which must be reviewed by an accountant prior to consideration at each AGM. No audit requirement.
  • Tier 3 (annual revenue of more than $1m) – financial statements to be audited by a practising accountant prior to consideration at each AGM.
  • Financial records to be retained for at least 7 years, regardless of tier.
  • Associations to hold their annual general meeting within 6 months of the end of its financial year.
  • Associations to continue to report to members rather than lodge financial statements with the Commissioner.

Management committee requirements

  • The Current Act does not refer to management committee eligibility requirements.
  • The Bill prohibits certain persons from being members of a management committee of an association.
  • Penalties of $10,000 apply for breach.

Officers’ duties

  • The Current Act does not set out the duties of directors/committee members.
  • The Bill introduces fiduciary duties (in line with general law and the Corporations Act 2001) owed to the association by its “officers”.
  • “Officers” includes members of a management committee, senior/key employees and “a person who has the capacity to significantly affect the association’s financial standing”.
  • Penalties of $10,000 apply for breach.

Privacy

  • New measures to enhance the privacy of members such as the removal of the requirement for a member’s residential address or postal address from the register of members.
  • Information on the register to be used only for purposes “directly connected with the affairs of the association” or “related to the administration of the Act”.
  • Association may require a person wishing to inspect the register to make a statutory declaration setting out the purpose for which the application (to inspect the register) is made.
  • Penalties of $10,000 apply for breach.

Please read more about the Associations Incorporation Act 2015 in a series of articles by Brenton Oakley and Philip Mavor published on the Corporate & Commercial Updates Page.

The information published on this website is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.