1. Chapter 7
Associations

2. 7.1 Unincorporated Associations
A not-for-profit association does not have to be formally incorporated under any legislation. It can exist as the combination of people who demonstrate a common interest and purpose through:
organisation
continuity
clear criteria or method to identify members such as a name or title
a written constitution or rules
some form of contract between the members
the existence of a committee and a bank account.

3. Advantages / Disadvantages
The advantage of operating as an unincorporated association is that no formalities are involved in its formation or in the conduct of its affairs.
The lack of separate legal status of an unincorporated association can be a substantial disadvantage.

4. Advantages / Disadvantages
An unincorporated not-for-profit association cannot:
buy, lease or own property;
enter into a contract or be liable in tort;
sue or be sued; or
receive a gift, be the beneficiary of a trust or be left property by will.

5. Advantages / Disadvantages
An unincorporated association can only act through its members
The members of an unincorporated association may sue and be sued in their own names, and do not enjoy limited legal liability.
The committee members may also be liable in negligence if the negligence was suffered by the third party as a result of one of the activities of the association
Courts are reluctant to intervene in the internal affairs of an unincorporated association such as disputes between or as to the rights of members unless it involves exceptional circumstances
Some unincorporated associations may only be active for a short time and quickly cease to exist

6. 7.2 Incorporated Associations
A not-for-profit association may incorporate by:
registering under the applicable state or territory legislation.
registering as a company limited by guarantee under the Corporations Act 2001 (Cwlth).
being the subject of a Royal Charter or
by being the subject of a special statute.

7. Four Incorporation Methodologies
Not-for-profit association incorporated under the Associations Incorporations Act 1985 (SA) – Community Bridging Services Inc
Company limited by guarantee – BRINK theatre company
Royal Charter – Chartered Institute of Company Secretaries in Australia Ltd
Special legislation setting up the body corporate – The Royal Society for the Blind – The Royal Institution for the Blind Act 1934 (SA)

8. Incorporated Associations Legislation
Associations Incorporations Act 2009 (NSW)
Associations Incorporations Act 1985 (SA)
Associations Incorporations Act 1987 (WA)
Associations Incorporations Act 1981 (Vic) and Associations Incorporation Amendment Act 2010 (Vic)
Associations Incorporations Act 1981 (QLD)
Associations Incorporation Act 1964 (Tas)
Associations Incorporation Act 1991 (Act)
Associations Act 2003 (NT)

9. Eligibility
An incorporated association must be not-for-profit and formed for a lawful purpose. It must have
the minimum number of members – five to seven depending on the legislation.

10. Powers of an Incorporated Association
acquire, hold, deal with, and dispose of, any real or personal property; and
administer any property on trust; and
open and operate banks accounts; and
invest its moneys in any security in which trust monies may, by Act of Parliament be invested or in any other manner authorised by the rules of the association; and
borrow money upon such terms and conditions as the association thinks fit; and
give such security for the discharge of liabilities incurred by the association as the association thinks fit; and
appoint agents to transact any business of the association on its behalf; and
enter into any other contract it considers necessary or desirable.

11. Meaning of ‘not-for-profit’
refers to the membership, purpose and activity of the association.
Any profits must be used to further the objects of the association and cannot be distributed to the members.

12. Not-for-profit legislation
any trading, either with members or the public, must be secondary to the main purpose of the association; and
trading with the public must not be substantial in volume in relation to the other activities of the association.

13. 7.3 Controlling & Operating the Incorporated Association
The Rules or Constitution of the Association should:
explain the nature of the association
the purpose and objects of the association
how the association will operate
how membership will be awarded
how membership may be lost
how to deal with internal disputes
how finances will be arranged
how to wind up the association at the end of its life.

14. Public Officer and Committee
An incorporated association must appoint a person to be the public officer to
provide a point of contact for the association and they are also the responsible person for lodging documents with the relevant state or territory government authority.

15. Formalities
Incorporated associations must keep proper accounting records
Record keeping
An incorporated association must hold an Annual General Meeting at least once a year
some incorporated associations must have their accounts audited by a registered company auditor
Admitting and expelling members

16. Winding Up an Incorporated Association
When an incorporated association dissolves, any surplus on distribution must go either to an incorporated association with similar purposes or
to charity, none of the surplus can be distributed to members.

17. Advantages of Incorporation
accept gifts and bequests in wills;
borrow money;
buy, sell and own property in its corporate name;
continue regardless of changes in membership because it has perpetual succession;
enter into contracts in its corporate name;
make a profit as long as the profit is put back into the association;
operate a bank account in its own name;
sue and be sued in its corporate name;
appear in court;
utilise the statutory power to invest and to deal with monies not immediately required;
perhaps obtain government funding where relevant for various purposes because it is an entity with a stable and settled structure

18. Disadvantages of Incorporation
expenses – application fees and the fees from the annual audit and lodging annual financial returns;
formalities – an incorporated association must comply with the relevant state or territory associations’ incorporation legislation regarding the operation of the association;
the incorporated association should take out public liability insurance in case it is in breach of any of its obligations;
as the incorporated association is a separate legal entity, the assets, rights and liabilities of the individuals who incorporate as an incorporated association become the assets, rights and liabilities of the incorporated association