Reading time: 4 minutes

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. 


Redundancies and Restructuring: Understanding Your Employer Obligations

Thursday 7 July | 11:00 - 11:45am

If you plan on making a role redundant, it is crucial that you understand your employer obligations. Our free webinar will explain.
Register Now

How to Sponsor Foreign Workers For Your Tech Business

Wednesday 13 July | 11:00 - 11:45am

Need web3 talent for your tech business? Consider sponsoring workers from overseas. Join our free webinar to learn more.
Register Now

Advertising 101: Social Media, Influencers and the Law

Thursday 21 July | 11:00 - 11:45am

Learn how to promote your business on social media without breaking the law. Register for our free webinar today.
Register Now

Structuring for Certainty in Uncertain Times

Tuesday 26 July | 12:00 - 12:45pm

Learn how to structure to weather storm and ensure you can take advantage of the “green shoots” opportunities arising on the other side of a recession.
Register Now

Playing for the Prize: How to Run Trade Promotions

Thursday 28 July | 11:00 - 11:45am

Running a promotion with a prize? Your business has specific trade promotion obligations. Join our free webinar to learn more.
Register Now

Web3 Essentials: Understanding SAFT Agreements

Tuesday 2 August | 11:00 - 11:45am

Learn how SAFT Agreements can help your Web3 business when raising capital. Register today for our free webinar.
Register Now

Understanding Your Annual Franchise Update Obligations

Wednesday 3 August | 11:00 - 11:45am

Franchisors must meet annual reporting obligations each October. Understand your legal requirements by registering for our free webinar today.
Register Now

Legal Essentials for Product Manufacturers

Thursday 11 August | 11:00 - 11:45am

As a product manufacturer, do you know your legal obligations if there is a product recall? Join our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Chloe Sevil
Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards