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Late last year, we provided details on the changes made by the Act
The Regulations, made on 20 November 2012, address:
- new matters that must be addressed in an association's rules;
- the fees to be paid to Consumer Affairs Victoria ("CAV");
- the fines that may be imposed by an association for a breach of its rules by a member;
- particular information that must be supplied to CAV in support of specified applications made under the Act, like applications for incorporation; and
- new model rules.
Matters an association's rules must provide for
The Regulations contain a list of matters that must be provided for in the rules of an incorporated association and new matters include:
- the association's name and purposes;
- a member's rights and obligations;
- resignation or cessation of a member and procedures;
- how a secretary is appointed and terminated;
- how minutes of meetings must be prepared and kept;
- procedures for members to access minutes of general meetings;
- what, if any, are the members' rights of access to committee minutes.
New model rules
The key points about the new model rules are:
- associations using the model rules can determine their own financial year without being taken to "alter" the model rules;
- the general rights of members are listed, including rights about general meetings;
- a new member category has been created for "associate members" who are not entitled to vote;
- associations may take disciplinary action against a member who refuses to support the purposes of the association;
- a disciplinary subcommittee must be appointed by a committee of the association to hear a disciplinary matter and to determine what action, if any, to take against the member;
- a member must not initiate a grievance procedure about a disciplinary action until the disciplinary procedure has been completed;
- the amounts (if any) of the annual subscription and joining fee must be confirmed or varied as part of the ordinary business of the annual general meeting;
- a member appointing a proxy may give specific directions as to how the proxy is to vote, otherwise the proxy may vote on behalf of the member in any matter as he or she sees fit;
- IMPORTANT – the rights of a member are not transferrable and end when membership ceases (on resignation, expulsion or death);
- new duties are imposed on committee members, which apply in addition to the general duties of office holders contained in the Act. Committee members:
- must become familiar with the rules and the Act
- are collectively responsible for ensuring an association complies with the Act
- must exercise their powers and discharge their duties with reasonable care and skill, in good faith in the best interests of the association and for a proper purpose
- must not make improper use of their position or information acquired by virtue of holding their position so as to gain an advantage for themselves or any other person or to cause detriment to the association
- must comply with the rules and other duties that may be imposed on committee members from time to time by resolution at a general meeting.
- there are detailed position descriptions for the secretary and treasurer, including additional duties and required tasks.
- the committee must meet at least four times in each year at the dates, times and places determined by the committee.
- the new obligations in the Act about the accuracy of financial records and the preparation of financial statements are reflected in the rules.
Statutory obligations remain the same and a current association remains incorporated with the same number as previously. The obligations are:
- to maintain records and keep financial records for 7 years;
- to conduct annual general meetings;
- to lodge annual statements;
- to notify the registrar of changes;
- to notify the registrar on winding up the association;
- to have and use an internal grievance procedure;
- IMPORTANT – to display the registered name and number of the association in all its notices, advertisements and other official publications and in all its business documents.
As we stated in our newsletter last year, associations need to decide if they will adopt the new model rules, adopt their old rules or alter their old rules so they provide for the matters the regulations require.
A special resolution is required to alter an association's rules. If an association does nothing before 26 November 2013, the new model rules will automatically apply.
If an association resolves to keep its old rules, they will apply to the extent they are not inconsistent with the new model rules. If an item or matter that is required to be provided for in the rules of the association is not in the association's rules then the applicable model rule provision will be incorporated into those rules.
If an association resolves to change its rules, it must apply to Consumer Affairs Victoria for approval of those amended rules.
What can an association do?
An association should contact Hunt & Hunt if advice is needed about adoption of the model rules or to update their own rules to comply with the Act and Regulations. Our team can also provide advice on a comparison between the old Act and the new and assistance for secretaries.