Law change no cause to panic

NOT-FOR-PROFIT GROUPS AFFECTED

THE REPORTER, July 12 2016

(BUY SMART with Acting Consumer Protection Commissioner David Hillyard)

WHETHER it is the work social club, local football club, a political group or voluntary service, the chances are you are a member of an association or club, or someone in your family is.

If so, you need to be aware that the Associations Incorporation Act 2015 became law on July 1 and it applies to more than 18,000 not-for-profit groups and replaces the 1987 Act.

Do not panic and rush out thinking you have to write a whole new constitution for your group. You have until July 1, 2019 to update things like that, should you need to.

To reassure you further, these facts remain unchanged:

If you are a present committee member you still are; your incorporation certificate remains valid and present membership has not changed;

New associations can incorporate and become a separate legal body just as under the old laws;

The new law was drafted to reflect the fact that many associations have grown and become more corporate in their activities, structure and dealings.

Many bigger organisations employ paid staff and generate significant revenue.

One of the main changes is the introduction of a three-tiered financial reporting system.

This means smaller clubs and groups with an annual revenue of less than $250,000 are not required to have their financial records independently audited.

Yet there may be many situations where the association chooses to do so to satisfy its members or if applying for a government grant or it holds a government licence.

Associations with revenue between $250,000 and $1 million must have their financial accounts independently reviewed and those in excess of $1 million must have their records formally audited.

Many incorporated associations carry on forms of business or trading. The new legislation makes it clear that this is acceptable, provided all profits from these ventures are applied solely towards achieving the incorpo_ rated association’s objects or purposes and the profits are not paid to members.

There is a Model Rules template as a starting point for everyone and groups can download a checklist at www.commerce.wa.gov.au/publications/associations-rules-checklist.