Key Changes- incorporated associations in Queensland
July 2020 | News | Tina Lee and Stephanie Judd
On 22 June 2020, the Associations Incorporation and Other Legislation Amendment Act 2020 (Queensland) (Amendment Act) was assented to.
This Amendment Act has changed some aspects of the Associations Incorporation Act 1981 (QLD) (Associations Act), which is the primary legislation regulating incorporated associations in Queensland. It is the latest in an ongoing reform process that commenced in 2003 to improve the regulatory environment for incorporated associations to make it more fit-for-purpose. The last substantial reforms took place in 2007, and these most recent changes intend to reduce red tape and improve corporate governance.
The headline changes to the regime for incorporated associations are summarised below, with amendments coming into effect progressively:
Duties – From 30 June 2021, officers and management committee members of Queensland incorporated associations will be bound by certain duties. These duties largely reflect, but are not identical to, ACNC governance standard 5, which would be familiar to those who manage incorporated associations which are registered charities:
- You must exercise your powers and discharge your duties with care and diligence, in good faith in the best interests of the association, and for a proper purpose, and you must not improperly use your position (or information obtained from your position) to gain (directly or indirectly) a pecuniary benefit or material advantage for yourself or another person.
- You must prevent insolvent trading, and disclose both material personal interests and remuneration or benefits given to you, senior staff members, and your relatives.
- It is important to note the following:
- Committee members or other officers of the incorporated association are bound by these duties. An “officer” includes the association’s president, secretary, treasurer and any person who is a member of its management committee, or who is appointed as a manager by the management committee. The definition is broader than the concept of “responsible entity” (more commonly referred to as “responsible persons”) for a registered charity. This means that, if your association is a registered charity incorporated in Queensland, in addition to keeping “responsible persons” aware of ACNC governance standard 5, you must ensure that all your officers are aware of their duties under the Associations Act.
- Penalties apply if these duties are breached (Part 7, Divisions 2 and 3 of the Associations Act). The penalties are personal to the committee member or officer of the incorporated association who is in breach of a relevant duty. This differs from the situation under the Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act). Under the ACNC Act, it is the registered charity that must comply with ACNC governance standard 5 and will be penalised should its responsible persons breach any of the duties. The ACNC’s most far-reaching power in relation to the responsible person is to suspend or remove them from their role in some cases.
Management committee eligibility – From 25 June 2020, the period of time after which a person who has been convicted of certain offences may be eligible to sit on a management committee has been reduced from 10 years to 5 years, subject to certain conditions (section 61A of the Associations Act).
Incorporated associations should continue to be mindful of the other requirements relating to the eligibility of a person to be a member of their management committees. For those associations which are registered charities, ACNC governance standard 3 sets out the suitability criteria for responsible persons.
Clarification around model rules – From 25 June 2020, incorporated associations may adopt the model rules or replace their own rules with the model rules at any time, provided certain processes are adhered to (section 46 of the Associations Act).
2. Streamlined financial reporting
From 30 June 2021, entities that are registered charities will be exempt from the requirement to lodge an annual summary of financial affairs with the Queensland Office of Fair Trading (sections 59 – 59C of the Associations Act). This is a welcome removal of duplicated reporting requirements for those incorporated associations which are registered charities.
3. Internal grievance procedures
Incorporated associations must have internal grievance or dispute resolution procedures in place by 30 June 2022 and may either observe the procedure contained in the model rules or use its own customised process by passing a special resolution to include it in their rules, provided that it adheres to each of the prescribed principles for the grievance procedure set out in the AI Act (section 47A of the Associations Act). The intention is to eliminate the need to resolve disputes in the Supreme Court of Queensland, and the associated costs.
4. General meetings
From 25 June 2020, an incorporated association will no longer need to provide for the use of technology in its rules to be able to use such technology at its general meetings, as section 56 of the Associations Act will now provide the ability to do so. This will be helpful if an association is unable to hold meetings in person, particularly if public health restrictions are maintained due to the COVID-19 pandemic. The technology must be sufficient to reasonably allow all members to hear and take part in discussions.
5. General operations
From 30 June 2021, it will be optional (rather than required) for an incorporated association to use a common seal when executing documents, and the secretary of an incorporated association must be over the age of 18 (section 66 of Associations Act).
6. Voluntary administration and cancellation
Introduction of voluntary administration – From 25 June 2020, an incorporated association will have the option to voluntarily appoint an administrator if it is experiencing financial difficulties (section 89 of the Associations Act).
Introduction of voluntary cancellation – From 25 June 2020, an incorporated association may apply (in certain circumstances) for a voluntary cancellation to avoid the lengthy winding-up process (sections 92A – 92C of the Associations Act).
If you are an officer or management committee member of an incorporated association registered in Queensland, we recommend that you review your rules and procedures to check that they are compliant and consistent with these changes.