Are you a small community group in New South Wales such as a sports, school or arts group? If you are, then the recent changes to the Associations Incorporation Act 2009 (NSW) (the Act) may affect you and your association. The changes affect the model constitution (forming Schedule 1 of the Act) which governs the rights and responsibilities of members. Below, we first step you through the key characteristics of community incorporated associations before discussing the changes.

What is an Incorporated Association?

An incorporated association shares many characteristics with a public company limited by guarantee. An incorporated association, however, is typically restricted to operating in the state of registration, whereas a public company limited by guarantee can operate Australia-wide.

An incorporated association is a ‘legal person’ – it can enter into contracts in its own name, open a bank account, hold property and be sued – all the characteristics that flow from being a separate legal entity to its members.

Each different state and territory have a separate regime for incorporated associations. In New South Wales, this is the Associations Incorporation Act 2009 (NSW).

Small community groups such as sports clubs and art groups usually choose to register as incorporated associations. Examples of incorporated associations include the Fairfield City Art Society Incorporated and the Aus-China Culture Exchange Association.

The Model Constitution

Are you free to go about running your incorporated association however you would like? Holding meetings in remote, cliff-top locations, at short notice and isolated from other members? Can you exclude others from voting? Can you be your own incorporated association despot? Not in this town you can’t!

Every incorporated association must have a constitution – a legal contract between the association and its members – governing how the association operates.

An association can create its own constitution, or it can use the model constitution provided in the Act. The model constitution outlines, among other matters, the following: 

  • Membership qualifications (if any);
  • Fees to be paid;
  • Members’ liability;
  • Dealing with internal disputes;
  • Calling general meetings;
  • Notice of general meetings; and 
  • Voting.

What are the Changes?

The Act changed from 1 September 2016, affecting several key changes: 

  • Joining: Potential members can now apply for membership rather than be nominated by the association;
  • Welcome to the 21st century: Minutes can now be taken electronically alongside using technology to facilitate a meeting in two different places (e.g. using a conference call facility). Voting at meetings can also be done electronically (the Act did not deal with these matters previously);
  • Not for profit: The Act provides that an association’s funds must be applied consistently with the Association’s objectives and cannot be used to gain a financial benefit for members; and
  • Official address: The address of an association must now be in NSW (formerly this was not specified).

The most important change is the duty of care members owe to the association and the members’ personal liability. 

  • Duty of care: The Act previously only provided that a member needed to disclose a conflict of interest and act honestly in the performance of his or her duties. A member also could not allow an association to trade while insolvent. From 1 September 2016, members must carry out their functions for the benefit of the association, so far as practicable and with due care and diligence.
  • Personal liability: From 1 September 2016, the Act provides members with protection from personal liability where they are acting in good faith while performing their duties.

Key Takeaways 

Incorporated associations are used by many small community groups to run their own activities – your local hockey club is likely an incorporated association, as would be the arts group down the road. A constitution must govern each association – either one created bespoke for the association or associations can use the model constitution provided in the Act. 

Changes from 1 September 2016 mean that members are protected from personal liability where they act in good faith and the Act now explicitly provides that members must act in good faith in the performance of their duties.

If you have any questions about these changes, get in touch with our commercial lawyers on 1300 544 755. 

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Chloe Sevil
Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at

View Privacy Policy