Club Guide- Changes to the Associations Incorporations Act - VicSport

Club Guide- Changes to the Associations Incorporations Act(1981)What is an incorporated association?There are more than 38,000 incorporated associations in Victoria. They are clubs or communitygroups, operating not-for-profit, whose members have decided to give their organisation a formallegal structure.When a club or community group incorporates, it becomes a ‘legal person’ – that is, a legal entitythat stays the same even if its members change. It can enter into contracts in its own name; forexample, to borrow money or buy equipment. This protects the individual members of theassociation from legal liabilities.If you are unsure if your club is incorporated you can check the register. Additionally if you are anincorporated association you should check that the contact details are up to date on the register sothat you receive information on an ongoing basis from Consumer Affairs Victoria.http://www.consumer.vic.gov.au/clubs-and-not-for-profits/incorporated-associations/search-foran-incorporated-associationChanges to the Associations Incorporations Act 1981The Associations Incorporation Act is Victorian legislation that provides the ability for clubs to legallyincorporate. The Act has recently been reviewed and changed and is now called the AssociationsIncorporation Reform Act 2012.Changes to the Act came into effect on the 26th November 2012 andinclude some important reforms that sporting groups need to be aware of.This summary is not an exhaustive list of all the changes introduced by the new Act. It containscomments which are general in nature, they are not intended be relied upon as a substitute forspecific professional advice. A full copy of the Act can be obtained from:http://www.consumer.vic.gov.au/resources-and-education/legislation/legislation-we-administer#ahttp://www.legislation.vic.gov.auSome of the changes to the ActLegal duties applying to committee members. Committee Members are to discharge dutieswith reasonable care and diligence to exercise powers and discharge duties in good faithand for a proper purpose. The new Act also introduces civil penalties (fines of up to$20,000). Office holders who fail to discharge their duties appropriately can be fined.Association providing Indemnity for office holders- The new Act creates an obligation on allassociations to indemnify committee members against any liability incurred in good faith bythat committee member on behalf of the association. For example, if a committee memberis sued for something they have done on the clubs behalf in good faith and must paydamages, the club must provide the indemnity from its assets – the government does notfund this indemnity.

If your organisation currently uses the model rules, it should review the new model rules todetermine if they are suitable for its purposes. The club can make changes and draft its own rulesand submit these to Consumer Affairs Victoria however If you do not notify Consumer AffairsVictoria within 12 months (26/11/13) of the new laws commencing the current rules willautomatically be replaced with the new model rules.If your association uses its own rules (that is, not the model rules), these continue to be valid, butonce members decide to make any changes, the rules must also address every item required underthe new laws. In the meantime, if there is an inconsistency between your association's existing rulesand the new Act, the requirements of the new Act apply.Understandably this can be a little confusing and if clubs elect t not to do anything will automaticallybe taken to operate under the new model rule provisions however clubs and sporting organisationsshould take the opportunity to review their rules and ensure they are complete and comply with thenew Act, in doing so avoid confusion and uncertainty for the committee and club members.Additional InformationThis summary is not an exhaustive list of all the changes introduced by the new Act. A full copy ofthe Act and supporting Regulations can be obtained from:http://www.consumer.vic.gov.au/resources-and-education/legislation/legislation-we-administer#ahttp://www.legislation.vic.gov.auAdditional resources and information are available from:Consumer Affairs Victoriahttp://www.consumer.vic.gov.au/clubs-and-not-for-profits/incorporated-associations/adapting-tothe-new-lawsPILCH Connecthttp://www.pilch.org.au/AIA_Bill2010/vicsporthttp://www.vicsport.asn.auThis document contains comments which are general in nature, they are not intended be relied uponas a substitute for specific professional advice. No responsibility can be accepted by vicsport or theauthors for loss arising to any person acting as a result of any material in this document.