Red tape reduced for charities and incorporated associations
17 June 2020
Associations Incorporation and Other Legislation Amendment Bill 2019 was passed by Parliament on 16 June 2020.
The Bill introduces changes to reduce red tape and strengthen the internal governance of incorporated associations.
A Fair Trading spokesperson said we know that there are thousands of Queenslanders involved in community groups and it takes a huge amount of organisation and commitment to run these associations effectively, so we are simplifying processes and reducing the administrative burden.
“The amendments allow for certain classes of association to be exempted from the requirement to submit annual financial reports to the Office of Fair Trading," the spokesperson said.
“This will enable the Government to consider the exemption of charities who fulfil an annual financial reporting obligation to the Australian Charities and Not-for-profits Commission from Queensland reporting requirements.”
The new laws improve internal governance arrangements for incorporated associations, enabling those elected to represent an association to:
- keep proper financial records
- exercise a duty of care, due diligence and good faith
- not improperly use their position, or information gained through their position
- disclose any material personal interest relating to matters considered by the management committee
- not allow the association to incur debts while insolvent.
“The government recognises that management committees of incorporated associations selflessly give their time and energies for the community and that the vast majority of them already meet the standards set in the new laws," the spokesperson said.
“For these committees there will be little practical difference to their day-to-day operations from these new laws.
“The amendments are however required to ensure the regulatory framework appropriately safeguards the integrity of the sector. Similar standards are provided in the associations incorporation legislation of most other jurisdictions.
“We are also improving the internal governance of incorporated associations by requiring them to have an internal dispute resolution process. This change will provide members of an association with an easily accessible process for resolving issues which might arise.
“This change ensures any concerns about the application of an association’s rules are appropriately heard by that association’s management committee, with a mediation process used where necessary. Anyone appointed to determine the outcome of a dispute must be an unbiased party.
“Management committees will also be required to disclose the level of remuneration paid to management committee members, senior staff, and their relatives.
“The disclosure of this remuneration will ensure members of an association are fully informed about how the association’s funds are spent.
“Amendments to the Associations Incorporation Regulation 1999 will be required in support of these new laws, and my department will shortly be commencing a consultation process for this.
“The consultation will also seek views on how existing provisions of the regulation, and the model rules contained in the regulation, can be improved.”
Other amendments contained in the Bill:
- apply the Fair Trading Inspectors Act 2014 (FTIA) to the conduct of investigations under the Associations Incorporations Act;
- clarify that an incorporated association may adopt the model rules at any time after its incorporation;
- make optional the requirement for incorporated associations to have a common seal;
- allow incorporated associations to use communications technology in the conduct of meetings, without requiring associations to amend their rules;
- reduce the ineligibility for election to the management committee to five years in all situations, for consistency with the approach adopted in other states and territories;
- require the secretary of an incorporated association to be at least 18 years of age, regardless of the circumstances in which the secretary is appointed;
- allow incorporated associations to appoint a voluntary administrator under the Corporations Act 2001 (Cth) with some modifying provisions;
- introduce a simplified mechanism by which incorporated associations can apply to voluntarily cancel their incorporation, provided they have no outstanding debts or liabilities and meet other relevant criteria.
While some of the new provisions will commence on assent, it is anticipated the new provisions dealing with the internal governance of incorporated associations will commence in 2021-22, to give associations time to put in place any internal procedures they deem necessary.
This will also allow the Government to develop the model rule grievance procedure in consultation with the sector and give associations at least one AGM cycle in which to consider the suitability of that procedure to their unique needs.
Consultation on the Associations Incorporations Regulations will commence later in 2020.