A club’s constitution can be difficult to understand. This easy to follow module examines the legislation and defines an incorporated club’s legal responsibilities.
incorporation and Constitutions
Incorporation gives an organisation the powers of an individual. An incorporated organisation is therefore a legal entity, separate from its members. This separation provides a certain level of protection, which limits the likelihood that management committee members can be held personally responsible for an organisation’s debts and liabilities.
Although this protection is not absolute, it does offer peace of mind for management committee members who carry out their responsibilities in good faith, with care and diligence, in the best interests of the organisation and within the law.
As a legal entity, an incorporated association can, in its own right:
Own land and chattels
Enter into tenancy or lease agreements
Enter into contractual agreements
Sue and be sued
To continue to receive the benefits provided by incorporation, your club must comply with the provisions of the Associations Act 1981, many of which are spelled out in your constitution or rules. For example, your club must:
Operate according to an approved constitution or set of rules
Maintain a register of members
¾ Keep a set of books to record all financial transactions
Keep accurate minutes of management committee meetings and general meetings
Hold an annual general meeting each year and elect a management committee
Once incorporated, an organisation will operate under a set of rules, usually known as its constitution. This constitution must be written in a way that is consistent with the Associations Act 1981.
The Office of Fair Trading’s model rules for incorporated associations provides a good starting point for most clubs and associations. A copy of the current version model rules is available for download from the club.COACH online resource hub.
Some standard sections of a constitution are:
Name, objects and powers (who we are and why we exist)
Classes of membership, including voting rights and entitlements of each class
Admission, rejection, suspension and termination of membership, including appeals
The minimum positions to be included on the management committee, election procedures and how to fill casual vacancies that occur if people resign
Functions of the management committee
Meetings, including notice requirements, voting, proxies and minutes
Funds and accounts, financial year end date and financial reporting
Winding up and distribution of assets