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Associations
Incorporated associations cannot be used to derive financial gain for their members, which confines them almost exclusively as a business structure used in the not-for-profit sector, such as religious bodies, clubs, hospitals and charitable institutions to limit the liability of their members.
The incorporated associations legislation is similar, although not uniform, throughout Australia. The Acts are administered by separate regulatory authorities in each state and territory.
Incorporated associations enjoy most of the benefits of companies including:
- • status as a separate entity, ie its own legal personality with perpetual succession;
- • limited liability of members;
- • the ability to sue and may be sued;
- • the ability to enter into contracts in their own name;
- • the ability to appoint agents to transact business;
- • the ability to acquire, hold, deal with and dispose of any real or personal property; and
- • the ability to pledge assets as security to raise debt finance.
An incorporated association will require a set of rules, akin to a company constitution. The entity is customarily run by a committee appointed in accordance with those rules. Under the state and territory Acts, the entity must also have a public officer. In Victoria, the term “public officer” is replaced with the term “secretary” under the new Associations Incorporation Reform Act 2012 (Vic). See Sch 4, cl 9 of Associations Incorporation Reform Act 2012 (Vic).
The process of registration is similar across the states and territories but not identical. Application is made in the proper form and a fee paid. The proposed name of an incorporated association must be acceptable and substantially the same analysis applies for association names as for business names generally.
Ongoing compliance obligations include financial and other record keeping, holding annual general meetings and filing annual returns. An incorporated association will be subject to the many laws which apply to running businesses generally.
See Associations.
