How Do We Change the Rules or Objects of Our Association?

Changing the constitution is the one power the members can never delegate. Section 62(2) reserves to them the power to alter the rules and the objects, and section 21 sets out how the alteration is made and, critically, when it takes effect.

Who decides

Section 62(2)(a) and (b) of the Associations Incorporation Act 2023 list “the power to substitute, alter or amend the incorporated association’s rules” and “the power to substitute, alter or amend the incorporated association’s objectives” among the powers that “may be exercised by the members only and may not be delegated under the rules or otherwise”. Section 63(1) requires them to be exercised by special resolution. The committee can propose changes but cannot make them; a committee that purports to amend the rules has done nothing.

The special resolution

Section 21(1) provides that, subject to any restriction in its rules, an incorporated association “may by special resolution, substitute or adopt new rules or amend its existing rules”. A special resolution needs 75 per cent of the votes of members entitled to vote and voting, at an annual or special meeting called on at least 21 days’ notice specifying the intention to propose it as a special resolution (section 64(3)), or a written resolution signed by members holding 75 per cent of the votes (section 68). The rules may require more. The rules themselves must say how they are altered (Schedule items 12 and 14), and any procedural requirement in them, such as circulating the text with the notice, must be met.

Lodging with the Registrar within one month

In the case of the rules, the notice must be accompanied by “a statement that a special resolution authorising the alteration was duly passed” (section 21(5)). The notice of the special resolution itself must also be lodged within 20 days under section 64(5), so in practice the filing is made within 20 days of the meeting and covers both.

Public notice where member liability changes

Section 61 provides that members are not liable for the association’s debts unless the rules provide otherwise. Where the rules do make members liable to contribute to debts or to the costs of winding up, and an alteration of the rules affects that liability, section 21(3) requires the committee, within one month, to give public notice of the alteration in a newspaper or the Gazette, so that creditors who extended credit on the strength of the members’ liability learn of the change. For the great majority of associations, whose rules impose no such liability, this step does not arise.

No effect until lodged and registered

Section 21(4) is the provision that catches associations out. A change to the rules, objects or trusts “is of no effect until Subsections (2) and (3) have been complied with in respect of the substitution, adoption, amendment or alteration and the alteration has been filed in the register on the prescribed form”. Section 64(5) says the same of the special resolution: “until registered, does not take effect”. An association that passes a resolution to raise its subscription, change its objects or alter the committee’s term, and then acts on it before the Registrar has registered the filing, is acting on rules that do not yet exist. Elections held under unregistered rules, and expulsions under an unregistered disciplinary clause, are open to challenge. Until the online registry confirms registration, the old rules govern.

Existing rights and proceedings are protected

Section 22 provides that an alteration “does not affect any right, liability or obligation of the incorporated association or of any person, or any legal proceedings, existing or pending immediately before the alteration takes effect”. A member cannot be stripped of an accrued entitlement, a creditor of an accrued debt, or a litigant of a pending action by rewriting the rules.

Penalties

A committee member who fails to comply with section 21(2), (3) or (5) commits an offence punishable by a fine of up to K500 or three months’ imprisonment, or both (section 21(6)); failure to lodge the special resolution within 20 days is a separate offence under section 64(7) with a fine of up to K2,500 or two months. The section 46 defences apply. The Registrar may extend time in special circumstances under section 159.