Proposed Amendments to the Associations Incorporations Act 2015

Ben Kiernan-Green, Adam Levine, Luke Paterson
K&L Gates LLP
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Background

On 19 September 2024, the Parliament of Western Australia introduced the Associations and Co-operatives Legislation Amendment Bill 2024 (Bill). The Bill makes amendments to the Associations Incorporation Act 2015 (WA) (Associations Act), which regulates the operation and governance of incorporated associations in Western Australia.

Broadly, the Bill seeks to modernise and improve the operation and effectiveness of the legislation by implementing recommendations from a statutory review of the Associations Act published in March 2023.

As further set out below, the amendments to the Associations Act include expressly permitting incorporated associations to hold virtual or hybrid meetings, extending restructuring regimes under the Corporations Act 2001 (Cth) to incorporated associations and including further protections relating to the personal information of members of incorporated associations. The Bill continues the trend of enhancements to the governance regime of incorporated associations in Western Australia.

Proposed Changes

Proposed Amendment to the Associations Act Current Position under the Associations Act
Reservation of Names A (prospective) incorporated association can apply to the Commissioner for Consumer Protection (Commissioner) to reserve a name for a period of three months.1 There is no means to reserve a name for a proposed incorporated association.
Restriction on Distribution of Surplus Property

The type of entities that may receive surplus property on the cancellation or winding up of an incorporated association will be expanded to include:

  • Associations incorporated under legislation in another State or Territory;
  • Aboriginal and Torres Strait Islander corporations;
  • Religious organisations incorporated by or under a written law; and
  • Entities endorsed as deductible gift recipients.2
 The type of entities who can receive surplus property is limited to those listed in section 24(1) – which do not include other associations incorporated in other jurisdictions or Aboriginal corporations.
Requirements for Special Resolution

If notice of a special resolution is not given in accordance with the existing subsections, the special resolution as passed is not automatically invalidated.

If the requirements for giving such notice (whether in the Associations Act or the rules of an incorporated association) are not complied with, members may still challenge the resolution in the State Administrative Tribunal (SAT).3

 If the association does not give written notice of the proposed special resolution, the time and place of the meeting,4 or set out the wording of the proposed special resolution, it is automatically invalidated and has no effect.5
Holding Meetings Remotely or in Part

Unless the rules state otherwise, members do not have to attend a meeting in person.6

Practically, this allows an incorporated association to hold general meetings virtually, or as a hybrid meeting, using meeting technology.

 Unless the rules of an incorporated association expressly allowed for this, an incorporated association could not hold virtual or hybrid meetings which was extremely prohibitive.
Inspection of Register by Member An association must make the register available for inspection by the member no later than 30 days after making a request (or a shorter period if stated in the rules of the association).7 The Associations Act does not provide a timeframe for providing access for members to inspect the register.
Restriction on Access to Personal Information

Members may apply to the secretary of an incorporated association to restrict access to personal information recorded in the register of members.8

If the secretary is satisfied that the prescribed circumstances exist, they must agree to the request.

If the secretary refuses the request, they must notify the member of such refusal within 30 days of the decision.

This amendment is intended to improve safety or security of concerned members.

Interestingly, no equivalent amendment is proposed to the Associations Act in respect of the register of officeholders.

Members can request access to a copy of the register of members.9

The rules may require the member to provide a statutory declaration setting out the purpose of the request and that the purpose is connected with the affairs of the association however, there is otherwise limited grounds on which access can be refused.10

Appointment of a Reviewer or Auditor

A reviewer or auditor may be appointed at a general meeting for a fixed term stated in the incorporated association's rules.11

This must be at least two years but not longer than five years.12

 An appointed reviewer or auditor holds office until they die, become insolvent, ceases to be qualified for appointment, is removed from office or resigns.13
Restructuring Under Corporations Act

Eligible associations may be subject to the restructuring provisions of Part 5.3B of the Corporations Act as an alternative to administration or winding up.14

This enables an incorporated association to retain control of the business affairs and property while developing a restructuring plan and enter into a restructuring plan with creditors.15

 The Associations Act is does not include equivalent provisions allowing these restructuring processes to apply to an incorporated association (as an alternative to administration or winding up).
Duties of Management Committee Members With Respect to Incurring of Debt Clarified that the appointment of a restructuring practitioner is a matter that can be considered in determining whether a member of the management committee took all reasonable steps to an incorporated association incurring a debt which caused it to become insolvent. No equivalent provision.
Commissioner May Revoke Approval of Distribution Plan The Commissioner may revoke approval of a distribution plan (a statement setting out information about surplus property to be distributed) if the approval was based on incorrect information.16 There is no means for the Commissioner to revoke their prior approval of a distribution plan.
Amendment of Approved Distribution Plan

The Commissioner may approve an amendment to the distribution plan if:

  • It is not possible for an association to comply with the existing plan; or
  • There are problems interpreting, implementing or completing the plan.17
 There is no means for the Commissioner to approve an amendment to the distribution plan.
Grounds on Which Commissioner May Act

The Commissioner may cancel the incorporation of an incorporated association if it is not in operation.18

No guidance has been provided as to what will constitute an incorporated association not being 'in operation'.

The Commissioner may also cancel its incorporation if it is in the public interest.19

The Commissioner may cancel the incorporation of an association if it has suspended its operations or has in effect been dormant for 12 months or more.20

There is no public interest ground.
Jurisdiction of SAT in Respect of Disputes A former member expelled by an incorporated association may make an application to SAT to challenge that expulsion within six months of their expulsion.21 The Associations Act does not expressly allow a former member to make application to the SAT to challenge their expulsion as a member – only current members may make application to the SAT to determine a dispute with the incorporated association.
Matters to be Provided for in Rules of an Incorporated Association An association must make rules allocating responsibility to specific officers or member for complying with reporting obligations under the Act or regulations.22 This is not a matter to be provided for in an association's rules.

The Bill had its first and second reading on 19 September 2024. At this stage, there is no date on which the Bill is expected to come into effect. We will continue to monitor the progress of the Bill.

1 Bill, s 20A.
2 The Bill, s 24.
3 The Bill deletes ss 51(5).
4 Act, ss 51(3)-(4).
5 Act, ss 51(5).
6 Bill, s 52A.
7 Bill, ss 54(1).
8 Bill, s 56A.
9 Act, ss 56(1).
10 Act, ss 56(2).
11 Bill, ss 87(2A).
12 Bill, ss 87(2B).
13 Act, ss 87(3).
14 Bill, s 121A.
15 Bill, s 121A.
16 Bill, ss 136A.
17 Bill, s 138A.
18 Bill, ss 144(c).
19 Bill, ss 144(g).
20 Act, ss 144(c).
21 Bill, s 182.
22 Bill, Schedule 1.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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