Incorporation of Associations
are two main benefits of incorporation for an Association:
- When an association attains the status of "Incorporated", the individual members of the association gain a limited liability status. This means that, if the club is sued, the liability of individual members
of the club is limited. This limit is usually $1.00 per member but this may differ according to the laws of the nation in which the association is incorporated. Example reasons why an association may be sued in a court of law include inability to pay debts when they fall due (insolvency) or a claim for damages for negligence caused by the association.
- When an association attains the status of "Incorporated", it gains legal personality. This means the association becomes a legal entity
apart from its members. This legal personality allows the Association to enter into contracts (e.g. bank loans, rental agreements, employment contracts) and to sue or be sued in a court of law. Until an association becomes Incorporated, it cannot do these things as it does not exist in the eyes of the law. If the members of the association want the association to obtain a bank loan, for example, they must put their own names on the contract.
When an association becomes "Incorporated", the law imposes a number of important obligations. Office bearers of the association must ensure these obligations are met. Some of the more important obligations are as follows:
- The association must have and adhere to rules that dictate how the organisation is managed. These rules are generally referred to as the organisation's constitution.
It is often the case that the association simply adopts the rules recommended by the relevant government authority. In such a case the recommended rules are often referred to as the model rules.
amendment of the constitution must be registered with the relevant government agency that oversees incorporated associations
- The association must complete and submit to the relevant government agency an annual return that provides the names and details of the
office bearers of the association.
change in the address of the registered office must be notified
to relevant government agency
change (election, appointment, etc) of office bearers (President, Vice-President, Treasurer
or Secretary) must be notified to the relevant government agency
association must ensure that an audited financial report is provided to the members at the annual general meeting.
to Incorporating a Club or Association
association can apply for incorporation if it is
a non-profit organisation i.e. does not provide financial
gain to its members and the members agree to adopt rules (the model rules as recommended by the responsible government agency).
application for incorporation needs to be made to the relevant government agency using forms supplied. The application form will usually require
information on the following:
name of the association to be incorporated
date of the general meeting at which the members
of the association passed a special resolution to
incorporate and to adopt proposed rules for the
name of the person who was appointed by the members
to apply for incorporation
of any land that the association owns or leases
of persons who will be office holders after incorporation
association's postal address
registered office of the association
address where the books of account will be kept.
name of the association's bank or other financial
of the unincorporated association.
number of members
approximate date the association commenced
the association is a branch of another association
and has gained permission from that association
- The appropriate fee must accompany the application for incorporation
which is sent to the government agency that oversees the incorporation of associations