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Rules for unincorporated associations

Rules for unincorporated associations

ACNC recently circulated a set of rules for unincorporated associations (worked up in conjunction with Justice Connect) and called for comment before 20 November 2015. The rules appear very useful for organisations which are small, do not have particular constitutions, and do not wish to become incorporated as these rules, give guidance for best practice.

The rules follow some of the standards applying in corporate rules, for example, when voting for any decisions in a company, namely for changes to the rules or changes to purposes a special resolution of members is required, that is, one for which 21 days notice has been given and 75% of members voting support.

Standard charity clauses are within the rules was only to permit activities that support the objects, prohibiting distribution of income or assets to members and requiring the association to operate as a registered charity. The winding up provisions require a special resolution and prohibition of distribution to members or organisations unless they are charitable with similar charitable purposes not carried on for profit or gain.

The rules contain an indemnity to protect committee members who could otherwise be sued and that indemnity allows the committee member to be reimbursed from the proceeds of the association.

The rules oblige the association to have a financial year and the standard period 1 July to 30 June has been selected.

The rules identify how membership will be recorded and persons admitted to membership.

The rules permit members to view the rules, general meeting minutes and the Register, but not copies of meeting minutes of the committee unless the committee specifically allows that.

The committee is to be empowered with all functions and powers of the association.  A committee member must satisfy the responsible person tests under the ACNC Act

The duties of committee members are set out and mirror many of those required of company directors and committee members of incorporated Associations.  This is strong governance and probably appropriate but it may dissuade individuals from agreeing to act as committee members.

An appropriate dispute resolution process is included as we are all aware that many committees often reach a situation of dysfunction where there are disagreements between members.

Overall the rules appear to be a helpful document.

Josephine Heesh, Partner

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