On 11 September 2014, the Associations Incorporation Bill 2014 (WA) was introduced into the Western Australian Parliament. The proposed legislation is currently making its way through the Parliament and is likely to shortly be enacted to replace the Associations Incorporation Act 1987 (WA).

 

The purpose of the proposed new legislation is to provide an improved framework to regulate incorporated associations which meet community needs and expectations. In modern times, certain incorporated associations have grown in size to well beyond what was intended for under the current legislation. Many associations are now undertaking significant trading activities which are contributing to the growth in size of some associations.

 

As a result, there is a now growing divide between the regulation provided for by the current Act and the regulation of similar not-for-profit entities incorporated under the Corporations Act 2001 (Cth).

 

The Corporations Act 2001 contains a much more comprehensive, although prescriptive, regime for regulating entities incorporated under that Act. The new Bill intends to cover a number of issues and deficiencies in regulation not currently dealt with under the current Act.

 

The new Act is ultimately a balancing act between overly prescriptive legislation and ensuring good governance. The Act is intended to promote efficiency, provide for greater accountability and also reduce compliance and administration costs.

 

The key reforms proposed by the Bill include:

  • Governance
    o Formalisation of officers’ duties and new duties imposed on officers as offences
    o Disqualification of certain persons from being officers
    o Increased penalties for various offences
    o New insolvent trading offences
    o Ability for Commissioner to apply to have statutory manager appointed to administer affairs of an incorporated association
  •  Financial Reporting
    o Increased reporting requirements dependant on association size (tiered system)
    o Mandatory audit requirements for larger associations
    o Obligation to retain financial records for at least 7 years
  • Rules
    o Legal effect of rules clarified
    o Provision of model rules
    o Requirement for internal dispute resolution procedures and ability for certain disputes to be heard by the State Administrative Tribunal.
  • Privacy
    o Additional privacy protections for members
  • Amalgamation procedures
    o Provisions dealing with amalgamation of associations

For further information, please visit:

http://www.commerce.wa.gov.au/consumer-protection/associations-incorporation-bill-2014

 

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