Changes to Queensland Laws for Incorporated Associations

A Bill to amend the Associations Incorporation Act was passed without amendment on 16 June 2020.

The Explanatory Notes to the Bill identify the key aims of the changes as being:

A.  Modernisation the Act;

B.  Improvement of the internal governance of associations; and

C.  Reduction of red tape.

New laws for associations

The key changes for Associations to be aware of are:

1. The legislation now spells out the governance obligations of management committee members which are:
   • To exercise their powers and discharge their duties with care and diligence, in good faith in the best interests of the association, and for a proper purpose;
   • To not improperly use their position to gain, directly or indirectly, a pecuniary benefit or material advantage for themselves or another person;
   • To not improperly use information obtained from their position to gain, directly or indirectly, a pecuniary benefit or material advantage for themselves or another person; and
   • To prevent insolvent trading.

2. Management committee members are now also required to disclose:
   • Material personal interests; and
   • Remuneration or benefits paid/given to themselves, senior staff members and their relatives.

The disclosure must be made to members at the AGM in relation to the relevant financial year.

3. A new requirement for the constitution of an Association to include a grievance procedure for dealing with any dispute under the constitution between:
   • A member and another member;
   • A member and the management committee; or
   • A member and the Association.

The grievance procedure must be consistent with the prescribed principles in the new section 47A. The most significant being:

• The grievance procedure must include mediation;
• A member must be allowed to appoint any person to act on behalf of the member; and
• Where there is a dispute between a member and the association, no disciplinary action can be taken until the grievance procedure has been completed.

4. Associations that are registered charities & provide financial reporting to the Australian Charities & Not for Profits Commission (ACNC) will no longer be required to also provide financial reporting to the Office of Fair Trading under the Associations Incorporation Act or the Collections Act.
5. Simplified procedures have been introduced for:
   • The voluntary cancellation of incorporation where an association has ceased to operate and has no outstanding debts or liabilities; and
   • Associations to place themselves into voluntary administration if they experience financial difficulties.
6. Associations will no longer be required to have and use a common seal.

Recommendations

There are a number of steps management committees should take to ensure their association is ready for the operation of these changes including:

1. A review and amendment of their constitution to ensure they adopt and comply with the changes;
2. Ensuring the members of management committees are aware of and understand the implications of the changes and how they should be applied to their association; and
3. Making any necessary changes to governance policies and procedures to accommodate the new laws.

For more information about the changes please contact Joanne O’Brien.

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