Deadline for associations – are you ready?

On 1 July 2016, the Associations Incorporation Act 1987 was repealed and replaced with the Associations Incorporation Act 2015 (“the Act”). The Act brought in new requirements, obligating all associations incorporated under the old act to review their rules or constitution to ensure that it complies with the new Act.

Since the Act came into effect on 1 July 2016, we have been in a sort of amnesty period – called the transitional period – to allow associations the time to review and amend their rules. This transitional period expires on 1 July 2019, after which all incorporated associations must comply with the Act, or risk penalties being imposed.

Many incorporated associations have been around for a very long time, and are often operating on rules that are antiquated and difficult to understand. Many associations have a patchwork quilt type of look to their rules, because they have been amended and varied and added to over decades. In many cases, these sorts of rules certainly do not comply with the Act. In recognition of this and to promote efficiency, the Department of Mines, Industry Regulations and Safety (“the Department”) (previously the Department of Commerce) has published a set of model rules (“the Model Rules”) which can be adopted by associations to ensure that their rules comply with the minimum requirements imposed by the Act. The Model Rules were first released late in 2007 for public consultation and have since been updated and amended based on feedback from the public and associations. You can download a copy of the Model Rules from the Department’s website by clicking here.

However, associations do not have to adopt the Model Rules, and many associations will not want to, having spent a great deal of time and energy in developing their own rules specific to their type of association. Many associations will require rules that properly reflect who they are, and how they govern themselves that the Model Rules won’t cover. If this is the case, it is imperative that associations that have not already done so, devote time to properly reviewing their rules and making the required amendments. This will most commonly involve drafting the changes, and then calling a general meeting and passing a resolution or special resolution to implement the proposed changes.

The minimum requirements for an association’s rules are set out in Schedule 1 of the Act, and the Department has also published a number of useful checklists and guides to assist associations with transitioning to the Act, which can also be downloaded from the Department’s website. It may be appropriate for many associations to take legal advice to ensure their rules comply with the Act in the event the association does not adopt the Model Rules. A review of an association’s rules by an experienced lawyer can be useful in identifying not only sections that do not apply with the Act, but also parts of the rules which are outdated, inoperative or confusing for members (including changing old language to plain English).

If you are an officer of an association, and have not done so already, do ask your Board whether your rules need to be updated before the deadline, or face the prospect of penalties. As always, we’re always happy to discuss should this raise any questions at your end.