The Act calls them “rules”; most associations call them a constitution. Section 3(2) says a reference to rules includes “the Constitution, regulations and by-laws (if any) of the association, howsoever titled”. Whatever the name, they must cover the Schedule.
Section 20: every association must have rules
Section 20 of the Associations Incorporation Act 2023 requires every incorporated association to have rules; requires an association being incorporated to adopt, by special resolution, rules that address the Schedule; requires a re-registering association to have such rules or adopt them by special resolution; allows the rules to deal with additional matters; provides that the rules “are a binding contract between the incorporated association and each member”; and provides that they “have no effect to the extent that they contravene, or are inconsistent with, this Act or any other law”. Section 4(b) makes compliant rules an essential element, and section 9(1)(d) makes non-compliant rules a ground of objection.
The fifteen matters in the Schedule
- The name of the association.
- The objects and purposes.
- The qualifications (if any) for membership.
- The membership subscriptions or dues (if any).
- The names, constitution, membership and powers of the committee, and (a) the manner of election or appointment of committee members; (b) their terms of office; (c) the grounds on which a committee member’s office becomes vacant; (d) the filling of casual vacancies; (e) the quorum and procedure at committee meetings; (f) the quorum and procedure at sub-committee meetings; and (g) the remuneration, if any, committee members are entitled to receive.
- The quorum and procedure at general meetings of members and of any sub-committees appointed by a general meeting.
- The time within which and manner in which notices of meetings and notices of motion are given, and the manner of calling general and special meetings.
- The sources of funds.
- The management of funds, in particular the mode of drawing and signing cheques, drafts, bills of exchange, promissory notes and other documents.
- The intervals between general meetings (which must occur at least once a year).
- Whether the accounts are to be audited annually or more frequently (the Act itself sets audit requirements for associations that must prepare financial statements).
- Subject to section 21, the manner of altering and rescinding the rules and making additional rules.
- Provision for the custody and use of the seal.
- Subject to section 21, the manner in which the objects or purposes may be altered.
- Subject to section 72, the custody of books, documents and securities.
Where the Act fills gaps or overrides the rules
Many sections apply “unless the rules provide otherwise”, so the rules can shape them: appointment of committee members by resolution (section 24(2)), one vote per member (section 63(3)), remote participation in meetings (section 65(2)), whether an annual meeting or annual report is needed for a member benefit association (sections 66(4), 74(3)), opting out of financial statements (section 81), and the expulsion procedure for member benefit associations and churches (section 71(3)). Other sections apply regardless: the powers reserved to members in section 62(2), the 75 per cent special resolution threshold as a minimum (section 64(3)), the duties and disqualifications of committee members, the requirement of an annual meeting for public benefit associations unless all members agree, and the accounting and filing obligations. Section 14(3) adds that the rules may deal with the association’s capacity and powers only to restrict them; they cannot enlarge what section 14 grants.
What good rules add
- A category clause stating whether the association is a public benefit or member benefit association and, for the former, that on winding up surplus goes to another public benefit association (section 143(4)).
- A non-distribution clause repeating the section 3 undertakings on profits and dividends.
- Classes of membership, joint memberships (section 64(1)), and how members resign.
- A disciplinary procedure that meets or exceeds section 71: 15 days’ written notice with reasons and a hearing.
- Conflict-of-interest rules that supplement section 40, which section 40(5) expressly permits.
- Whether the public officer may sign contracts (section 57).
- The balance date if not 31 December (section 3).
- Sub-committees and their gender balance where created by members (section 35(5)).
- A dispute resolution clause, since section 20(6) makes the rules a contract enforceable by members and the association against each other.
The rules as a contract
Because the rules are a contract between the association and each member, a member can sue to enforce them, and the National Court may, on a member’s application, order the committee to take any action the rules require (section 52), or restrain conduct that would contravene them (section 50). Committee members who cause the association to act contrary to the rules breach their duty under section 38(2). The rules are therefore not a formality lodged and forgotten; they are the law of the association, subject only to the Act.
The Act does not prescribe model rules, and the draft Regulation contains none. Associations re-registering should check their 1966-era constitutions against the fifteen items above and against the sections of the 2023 Act that override them, and adopt amendments by special resolution before applying. See changing the rules.
Sources
- Associations Incorporation Act 2023 — ss 3, 4(b), 9(1)(d), 14(3), 20, 21, 24(2), 35(5), 38(2), 40(5), 50, 52, 57, 62(2), 63(3), 64, 65(2), 66(4), 71(3), 72, 74(3), 81, 143(4), Schedule
Before relying on anything here, read the current text of the Associations Incorporation Act 2023 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.