On 2 November 2015 the Associations Incorporation Act 2015 (WA) (New Act) received Royal Assent. The New Act repeals and replaces the current Associations Incorporation Act 1987 (WA) (1987 Act). The New Act has now been proclaimed to commence on 1 July 2016.
Incorporated associations must comply with the New Act from 1 July 2016
All existing incorporated associations must comply with the requirements of the New Act from 1 July 2016, subject to the transitional provisions, and must notify the Department of Commerce of their address within 90 days.
The key changes contained in the New Act that will require immediate compliance are as follows:
- Members of the management committee are now subject to statutory duties of good faith, to act for a proper purpose and to not make improper use of information or position.
- Members of the management committee must now disclose all material personal interests (which include pecuniary and non-pecuniary interests).
- A person is not eligible to be a member of the management committee if they are bankrupt, or have been convicted of certain serious offences (such as fraud) within the previous 5 years.
- Outgoing members of the management committee must hand over records of the association.
- An association must give a copy of its rules to new members at no cost or expense (the rules can be emailed to the member or made available on the association’s website).
- An association must comply with the new financial reporting requirements from 1 July 2016 if its financial year runs from 1 July to 30 June, and from 1 January 2017 if its financial year runs from 1 January to 31 December.
- If an association resolves to wind up after 1 July 2016 it must comply with the winding up procedure contained in the New Act.
Updating rules of incorporated associations
All existing incorporated associations have 3 years from 1 July 2016 to update the rules of their association to ensure compliance with the New Act. The New Act provides that the rules of an incorporated association must address each of the matters set out in Schedule 1 Division 1, and must comply with each of the matters set out in Schedule 1 Division 2.
If an incorporated association adopts the Model Rules prescribed by the Regulations in their entirety and without modification, the association’s rules will comply with the requirements of the New Act, provided that the association has entered all relevant details such as the name, objects, quorum requirements, and financial year of the association.
If, at the end of the 3 year transition period, the rules of an association do not comply with the requirements of the New Act, the Model Rules will apply to the extent that the rules of the association do not address or comply with a matter in Schedule 1.
If an association was incorporated prior to the commencement of the 1987 Act, it may have been exempt from the requirement to update its rules to comply with the 1987 Act. The New Act does not exempt any associations from complying with its requirements. Therefore, all existing incorporated associations, including those that were incorporated prior to the commencement of the 1987 Act, and those subject to an exemption under the 1987 Act, must now update their rules to comply with the New Act.
Management committee may make relevant changes
During the 3 year transition period, the New Act allows the management committee to amend the association’s rules to comply with the New Act. Any alterations made by the management committee do not take effect until they have been approved by the Commissioner of the Department of Commerce.
Regulations prescribing the Model Rules and further information have not yet been released. The final version of the draft Model Rules is available on the Department of Commerce’s website.