Incorporation of Associations

Benefits of Incorporation

There are two main benefits of incorporation for an Association:

  1. When an association attains the status of "Incorporated", the individual members of the association gain a limited liability status. This means that, if the club is sued, the liability of individual members of the club is limited. This limit is usually $1.00 per member but this may differ according to the laws of the nation in which the association is incorporated. Example reasons why an association may be sued in a court of law include inability to pay debts when they fall due (insolvency) or a claim for damages for negligence caused by the association.
  2. When an association attains the status of "Incorporated", it gains legal personality. This means the association becomes a legal entity apart from its members. This legal personality allows the Association to enter into contracts (e.g. bank loans, rental agreements, employment contracts) and to sue or be sued in a court of law. Until an association becomes Incorporated, it cannot do these things as it does not exist in the eyes of the law. If the members of the association want the association to obtain a bank loan, for example, they must put their own names on the contract.

Obligations after Incorporation

When an association becomes "Incorporated", the law imposes a number of important obligations. Office bearers of the association must ensure these obligations are met. Some of the more important obligations are as follows:

  1. The association must have and adhere to rules that dictate how the organisation is managed. These rules are generally referred to as the organisation's constitution. It is often the case that the association simply adopts the rules recommended by the relevant government authority. In such a case the recommended rules are often referred to as the model rules.
  2. Any amendment of the constitution must be registered with the relevant government agency that oversees incorporated associations
  3. The association must complete and submit to the relevant government agency an annual return that provides the names and details of the office bearers of the association.
  4. Any change in the address of the registered office must be notified to relevant government agency
  5. Any change (election, appointment, etc) of office bearers (President, Vice-President, Treasurer or Secretary) must be notified to the relevant government agency
  6. The association must ensure that an audited financial report is provided to the members at the annual general meeting.

Steps to Incorporating a Club or Association

An association can apply for incorporation if it is a non-profit organisation i.e. does not provide financial gain to its members and the members agree to adopt rules (the model rules as recommended by the responsible government agency).

An application for incorporation needs to be made to the relevant government agency using forms supplied. The application form will usually require information on the following:

  1. The name of the association to be incorporated
  2. The date of the general meeting at which the members of the association passed a special resolution to incorporate and to adopt proposed rules for the association
  3. The name of the person who was appointed by the members to apply for incorporation
  4. Details of any land that the association owns or leases
  5. Details of persons who will be office holders after incorporation
  6. The association's postal address
  7. The registered office of the association
  8. The address where the books of account will be kept.
  9. The name of the association's bank or other financial institution
  10. Details of the unincorporated association.
    1. The number of members
    2. The approximate date the association commenced
    3. Whether the association is a branch of another association and has gained permission from that association to incorporate.
  11. The appropriate fee must accompany the application for incorporation which is sent to the government agency that oversees the incorporation of associations


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