In September 2014, the long-awaited Associations Incorporation Bill 2014 (WA) (Bill) was introduced into parliament to repeal and replace the existing Associations Incorporation Act 1987 (Act) and is currently under consideration in the Legislative Assembly.
For those sporting clubs that are incorporated under the Act as incorporated associations (association), a working knowledge of the key changes introduced by the Bill is vital. Understanding the changes introduced by the Bill is particularly important for committee members and those involved in the administration or financial affairs of the association.
Key changes affecting the operation of sporting clubs that are associations:
Financial reporting: Introduction of a three-tiered system for financial reporting and auditing obligations of associations, depending on the relevant association’s revenue in a financial year.
Protecting privacy: Stronger penalties for misuse of information on the register of members and inclusion of the ability for members to provide a contact email address instead of a physical address.
Committee members: The fiduciary duties of committee members to the association are now prescribed in the legislation.
Broad definition of ‘officer’: Use of a broad definition of ‘officer’ to include people who may influence decision making or the financial standing of the association and the imposition of obligations on an ‘officer’ of the association.
Trading: Removal of the restriction against an association from ‘trading’, provided that any profits are used to further the association’s objectives and individual members do not profit from the trading activities.
Constitution and model rules: Introduction of additional requirements that must be covered in an association’s governing document (often referred to as its constitution or rules). Model rules have been prepared to assist associations to prepare governing documents that comply with the requirements set out in the Bill. dispute resolution: Introduction of a requirement for associations to have internal dispute resolution procedures.
The Bill introduces additional and harsher penalties for noncompliance.
If the Bill is passed, associations and their committee members and officers will need to ensure that they comply with all the changes introduced by the Bill. A transitional period is provided in the Bill for this purpose.
Whilst associations should be aware of the approaching changes, the actual effect of these changes and the steps required to be taken by associations cannot be confirmed until the Bill is passed. Associations are reminded to be aware of the upcoming changes and to act within the three year transitional period to ensure compliance with the requirements set out in the Bill.