Victorian incorporated association reforms
New laws for Victorian incorporated associations
The Associations Incorporation Reform Act 2012 (the new Act) commenced operation on 26 November 2024.
For more information on how the new laws will affect your incorporated association, and for tools and resources on transitioning to the new laws go to:
For more information on new Associations Incorporation Reform Regulations and new model rules for incorporated associations, see below.
PilchConnect submission to CAV on draft Associations Incorporation Reform Regulations and RIS
On 26 November, the Associations Incorporation Reform Act 2012 (the new Act) comes into effect. The new Act implements a new legislative framework for incorporated associations in Victoria.
In early October, Consumer Affairs Victoria (CAV) released the draft Associations Incorporation Reform Regulations (draft Regulations) and a Regulatory Impact Statement (RIS) for public consultation. The draft Regulations include draft model rules for incorporated associations designed to meet the requirements of the new Act.
PilchConnect made a comprehensive submission (available below) outlining a number of key concerns with the draft Regulations and draft new model rules. In particular, PilchConnect submitted that:
- the new fee structure set out in the draft Regulations significantly increases fees to be paid by incorporated associations to CAV, and the rationale for this increase is not sufficiently explained. The increases in fees for lodging an association's own rules and for altering an association's rules will act as a barrier to associations drafting their own rules (which is often in the best interests of an association) and/or updating them to ensure they remain relevant and workable for the group.
- the draft Regulations do not adequately set out the circumstances in which a fine can be imposed on members of an association by the committee of that association, and do not provide a procedure for the imposition of fines on members.
- the draft model rules are problematic in several respects, including:
- the imposition of duties on committee members in addition to the duties provided for in the new Act and the common law
- the unfettered right of members to gain access to the broad category of 'relevant documents' of an association, and
- the use of legal language rather than plain English drafting.
PilchConnect's submission also provides a table of comments on each proposed model rule and alternative drafting options.
You can access the draft Regulations and RIS from CAV here.
A link to PilchConnect's submission to CAV is provided below.
Release of draft Associations Incorporation Reform Regulations and proposed new model rules for public consultation
Consumer Affairs Victoria (CAV) has released the draft Associations Incorporation Reform Regulations and a Regulatory Impact Statement (RIS) for public consultation. The draft Regulations include proposed new model rules for Victorian incorporated associations that reflect upcoming changes in the law.
Submissions on the draft regulations and proposed model rules are now closed. CAV anticipates that the finalised model rules will be released shortly before the new Act comes into effect on 26 Novermber 2012.
To assist organisations in understanding the draft model rules (which will be changed before finalisation), we prepared a table highlighting key differences between the current model rules and the proposed new model rules. The draft Regulations make other changes that you may wish to comment on such as proposed changes to fees charged by CAV, including:
- increases to fees charged when an association lodges new rules or submits changes to its rules, and
- a new 'tiered' fee structure for some fees.
Download the RIS and Regulations and read more at CAV's website.
Table of key changes: current model rules and proposed new model rules
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Current model rules
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Proposed new model rules
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"Financial year" means the year ending on 30 June (r2(1)).
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Associations using the model rules may determine their own financial year without being taken to "alter" the model rules (r3, s49(2) of the Act).
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Membership
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Once membership is accepted, the secretary must enter details on the member register within 28 days (r4(7)).
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Once membership is accepted, the secretary must enter details on the member register "as soon as practicable" (r11(1)(b)).
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A member must resign his or her membership by giving one month's notice in writing to the Secretary of his or her intention to resign (r6(1)).
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A member may resign by written notice with no required notice period (r17(1)).
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N/A.
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Introduction of a list of general rights of members, including rights in relation to general meetings (r13).
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N/A.
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Introduction of a new member category - "associate members" - who are not entitled to vote (r14).
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Discipline
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The grounds for disciplinary action against a member are where a member (r7(1)):
- (a) has refused or neglected to comply with the Rules, or
- (b) has been guilty of conduct unbecoming a member or prejudicial to the interests of the association.
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The grounds for disciplinary action against a member are where a member (r19):
- (a) has refused comply with the Rules, or
- (b) has engaged in conduct prejudicial to the association.
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The committee can impose a reprimand, suspension or fine on a member at a disciplinary meeting by resolution (r7(2)).
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The committee can impose a reprimand, suspension or expulsion of a member at a disciplinary meeting by 'absolute majority' resolution (r21(3)). There is no longer any mention of the type of resolution required to issue a fine to a member.
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The committee has power to impose fines of up to $500 on members r7(2) in accordance with disciplinary procedures.
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The committee's ability to impose fines of up to $500 on members is now contained only in clause 19 of the draft Regulations. There is no reference to the committee's power to fine members in the model rules.
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Grievance procedure
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A grievance procedure applies to a dispute between members and disputes between members and the association (r8(2)).
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A grievance procedure applies to a dispute between a member and the committee, as well as disputes between members and disputes between members and the association (r24(1)).
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N/A.
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A member must not initiate a grievance procedure in relation to a disciplinary procedure until the disciplinary procedure has been completed (r24(2)).
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Parties to a dispute must meet and discuss the matter within 14 days after the dispute comes to the attention of all parties (r8(2)) and hold a meeting in the presence of a mediator within 10 days if the initial meeting fails to resolve the dispute (r8(3)).
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Time limits for carrying out certain steps in the grievance procedure have been removed (rr25-26).
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General meetings
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N/A.
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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 (r29(3)(d)).
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A special general meeting can be convened by members if at least 5% of members entitled to vote request it (r10(5)).
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A special general meeting can be convened by members if at least 10% of members entitled to vote request it (r31(1)).
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The quorum for a general meeting is the physical presence of 5 members entitled to vote (r13(2)).
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The quorum for a general meeting is the presence (physical or via the use of technology) of 10% of all members entitled to vote (r35(2)).
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Members are entitled to appoint another member as a proxy by notice given to the Secretary no later than 24 hours before a general meeting (r19(1)).
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Members are entitled to appoint another member as a proxy by notice given to the Secretary at any time before the commencement of a general meeting (r33).
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N/A.
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A member must not act as a proxy for more than 10 members or more than 10% of the members (whichever is the lesser) on any one occasion (r33(6)).
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Committee
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N/A.
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The committee may appoint or remove staff, and establish sub-committees with terms of reference (r41(3)).
A general meeting of members may by resolution direct the committee on any matter within the committee's powers (r41(4)).
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The committee can have up to 2 ordinary members in addition to required officers (r20(3)(b)).
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The committee can have up to 5 ordinary members in addition to required officers (r43(e)).
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Nominations of members for election as a committee member must be made in writing and signed by two members of the association (r23(1)(a).
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An eligible member of the association may nominate himself or herself or be nominated by another member (with their consent) (r50(2)). Nominations are not required to be made in writing.
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A member may only be nominated for one office, or as an ordinary member of the committee, prior to the annual general meeting (r23(2)).
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A member who is nominated for a position on the committee and fails to be elected to that position may be nominated for any other position for which an election is yet to be held (r50(3)).
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N/A.
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An association can elect the ordinary members of the committee in one single vote (r52(2)).
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A committee member's position becomes vacant when a committee member:
- ceases to be a member of the association
- becomes an insolvent under administration within the meaning of the Corporations Act, or
- resigns from office by notice in writing given to the secretary (r24).
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Committee member must resign by written notice addressed to the committee (r55(1)).
A committee member's position becomes vacant if they:
- cease to be a member of the association (r55(2)(a))
- fail to attend three consecutive meetings without leave of absence under rule 66 (r55(2)(b)), or
- cease to reside in Australia (r55(2)(c)).
Other vacations of office are provided in section 78 of the Act.
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N/A.
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New duties of committee members:
- each member must become familiar with the rules and the Act (r44(1))
- committee members are collectively responsible for ensuring an association complies with the Act and committee members comply with the rules (r44(2)), and
- other duties may be imposed on a committee member from time to time by resolution at a general meeting (r44(3)).
These apply in addition to the general duties in the Act, including the duty of care and diligence and the duty of good faith and proper purpose.
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N/A.
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Introduction of detailed "position descriptions" for the secretary and the treasurer (r46, 47), including additional duties and required tasks.
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A committee member can be removed by passing a resolution at a general meeting (r30(1)).
The affected member may make representations of reasonable length to secretary/president and request that they be provided to members (r30(2)).
Member can ask that representations be read at the general meeting if not given to members (r30(3)).
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A committee member can be removed by passing a special resolution at a general meeting (r54(3)).
The rules do not contain a right that the affected committee member can make representations and have them provided to members at the general meeting.
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Committee meetings
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The committee must meet at least 3 times in each year at such place and such times as the committee may determine (r25(1)).
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The committee must meet at least 4 times in each year at the dates, times and places determined by the committee (r57(1)).
The date, time and place of the first committee meeting must be determined at the annual general meeting of the association, immediately after the members of the committee are elected (s57(2)).
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Written notice of each committee meeting must be given to each member of the committee at least 2 business days before the date of the meeting (r26(1)).
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Notice of each committee meeting must be given to each committee member no later than 7 days before the date of the meeting (s58(1)).
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N/A.
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Introduction of urgent committee meetings where the notice period is not achievable.
Resolutions at these meetings can only be passed by absolute majority (r59) and only the business for which the urgent meeting was convened can be conducted (r60(3)).
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Quorum is the presence of any 4 members of the committee (r27(1)).
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Quorum is the presence (in person or via the use of technology) of a majority of the committee members (r62(2)).
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N/A.
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If a committee member has a conflict of interest (a material personal interest in a matter being considered at a committee meeting), the member must not be present while the matter is discussed, and must not vote on the matter (r64).
Conflicts of interest must be recorded in the minutes of the committee meeting (r65(2)(c)).
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Other
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N/A.
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The new obligations in the Act relating to the accuracy of financial records and preparation of financial statements are reflected in the rules (r69, r70).
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An association must have a common seal (r33).
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A common seal is optional (r71(1)).
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N/A.
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The registered address of the association is the address determined by the committee or, where no there is no determination, the secretary's address (r72).
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How do the proposed new model rules affect me and my organisation?
Remember, the finalised model rules will be released shortly before the new Act comes into effect on 26 Novermber 2012.
If your association operates under the existing model rules, it will have 12 months from the commencement of the Act to either:
- adopt the (final) new model rules, or
- draft its own rules and have these rules approved by CAV.
If your association does nothing, the new model rules will apply automatically at the end of the 12 month transition period.
If your association operates under its own rules (previously approved by the CAV), it can continue to use these when the Act commences, until it either:
- adopts the (final) new model rules, or
- changes its rules and has those changes approved by CAV.
It is important to note that if your association's own rules are inconsistent with the new laws, they will no longer be valid to the extent that they are inconsistent. If your association's own rules do not cover all of the matters required by Schedule 1 of the Act, the rule in the new model rules that covers this matter will be automatically included in your association's rules.
What does PilchConnect think of the proposed new model rules?
PilchConnect closely tracked these and earlier reforms. We are in the process of reviewing the RIS, proposed Regulations and model rules. Our views will be captured in a submission which will include general comments, as well as more detailed recommendations on the drafting.
For more information go to our page on the new Act.
You can download the information on this page as a fact sheet:
2012 Reform Act passed
The Associations Incorporation Reform Act 2012 (the new Act) has been passed by the Victorian Parliament, incorporating changes to the Associations Incorporation Act 1981 passed in 2009 and 2010 and consolidating them in a re-write to the Act.
NEWS: CAV has announced that the Act will commence operation on 26 November 2012.
If you are a member of a community organisation interested in how the new Act will impact your association, click here for more detail on the changes.
If you are interested in the history of and our views on the changes, continue reading below.
Keep up to date on the impact of the new Act by subscribing to PilchConnect's e-bulletin here.
2011 Associations Incorporation Reform Bill
The Associations Incorporation Reform Bill 2011 (AIR Bill) was the basis for the new Act.
While PilchConnect has supported the rewrite of the Act, we had, and continue to have, concerns about some aspects of the drafting of the AIR Bill (see 'PilchConnect's key issues' document below).
The AIR Bill was debated in the Legislative Assembly on 28 March 2012. The Government introduced house amendments that address some of the drafting issues, however we still had concerns that:
- the officer duties are drafted in a complex and inconsistent way, and
- despite improvements made by the house amendments, the drafting of provisions in relation to the application of the model rules remains ambiguous.
We also considered the timing of the AIR Bill (with a proposed commencement date of 1 July 2024) and the complexity of the transitional arrangements as unfortunate - requiring organisations to seek good guidance and support prior to and after commencement of the reforms.
2010 reforms to Associations Incorporation Act 1981
In March 2010 Consumer Affairs Victoria released a draft Associations Incorporation Amendment Bill 2010 for public comment. PilchConnect requested its release to give the community sector an opportunity to provide comments.
PilchConnect closely tracked these and earlier (2009) reforms. Our submission includes overall comments, as well as more detailed recommendations on the drafting. While many of the reforms are desirable, we wanted to ensure key provisions are understandable for volunteer committee of management members.
The legislation eventually passed was the Associations Incorporation Amendment Act 2010 (link below).