The association's rules must state who has the power to administer its affairs. In the Associations Incorporation Act 1985 , this group is called the committee. Most associations use this term, but other names such as board, management, or collective can be used.
Under the Associations Incorporation Act 1985 , no person can be refused membership of a committee by reason only of the fact that she or he is a member of a class of persons for whose benefit the association is established. Employees of an association may also be committee members, unless the rules of an association state that they cannot.
The following people cannot be committee members or be in any way (whether directly or indirectly) concerned in or take part in the management of an incorporated association, unless they obtain the permission of the Corporate Affairs Commission. A person who does so without permission can be fined up to $5000.
- A person who is bankrupt;
a person convicted in the last five years or someone released from gaol within the last five years, for the following offences anywhere in Australia:
- an offence connected with the promotion, formation or management of a body corporate
- a fraud or dishonesty offence carrying a maximum penalty of more than three months gaol
- an indictable offence (that is, an offence that can be tried before a jury)
- an offence concerning the duties of officers of an association [Associations Incorporation Act 1985 s 39A]
- an offence of falsely representing that a body is incorporated so as to gain a personal advantage [Associations Incorporation Act 1985 s 60]
- certain other offences under the Corporations Act 2001 (Cth) [as set out in s41E Associations Incorporation Act 1985 ].
Under the Associations Incorporation Act 1985, the officers of an association include the committee members and also include any person:
- acting as a committee member
- occupying or acting in the position of secretary, treasurer, or public officer
- concerned in or taking part in the management of the association
- holding any other office mentioned in the rules, except positions that have no management rights, like a patron
- from whom the committee is accustomed to take directions or instructions.
Under this definition, it is likely that a co-ordinator of a community organisation could be considered an 'officer' of the association.
This section describes the duties of committee members under the Associations Incorporation Act 1985 . Note that committee members and certain other people are also 'officers' of an association. Officers of an association have additional duties, SEE DUTIES OF OFFICERS.
Disclosure of interest [Associations Incorporation Act 1985 s 31]
A committee member with a direct or indirect financial interest, no matter how small, in any contract or proposed contract with the association must disclose that interest to the committee as soon as possible, and to the next annual general meeting of the association. An example of a financial interest is where a committee member is involved in a business which can offer goods or services to the association (such as maintenance jobs, insurance, equipment, computer software). While a member may offer the best deal for the association, it is essential that the member does not receive any secret profit. A person failing to disclose a financial interest may be fined up to $5000.
Voting on a contract in which a committee member has an interest [Associations Incorporation Act 1985 s 32]
A committee member who has a direct or indirect financial interest in any contract or proposed contract with the association can take part in discussion about the contract but may not vote on the matter or take part in any decision about the contract. To avoid allegations of impropriety, the committee should conduct the final discussions and voting without the member concerned being present. This allows the committee to decide what is in the association's best interests free from the influence of that person. A breach of this section may lead to a fine of up to $5000.
Where a financial interest exists only because the committee member is a person for whose benefit the association is formed or because the interest is held in common with most other members of the association, the committee member does not have to disclose the interest and can both discuss and vote on the matter.
Similarly, it is not necessary to disclose an interest that exists only because the person is an employee of the association. However, the Associations Incorporation Act 1985 allows an employee to discuss the matter but not to vote on it. The committee must feel able to ask the employee to leave the room so that it can discuss the matter freely. This will help protect the committee from any suggestion of undue influence and reduce the risk of negligence.
Any person, not just an officer of the association, must comply with a requirement made under Associations Incorporation Act 1985 Part 2, Division 2, which allows the Corporate Affairs Commission to ascertain whether an association is complying with the Act.
General defence [Associations Incorporation Act 1985 s 58A]
It is a defence to an alleged offence under the Associations Incorporation Act 1985 if the accused person proves that the offence was not done intentionally and did not result from the accused person's failure to take reasonable care to avoid the offence happening.
Intent to deceive or defraud [Associations Incorporation Act 1985 s 39A(1)]
It is an offence punishable by up to four years gaol or $20 000 fine for an officer exercising her or his powers or duties to commit an act with intent to deceive or defraud the association, its members or creditors (including employees), creditors of any other person or for any fraudulent purpose.
Improper use of information or position [Associations Incorporation Act 1985 s 39A(2), (3)]
An officer or employee must not make improper use of information acquired by virtue of her or his position in the association, so as to gain an advantage or to cause detriment to the association. An officer or employee must not make improper use of her or his position in the association so as to gain an advantage or to cause detriment to the association. The advantage includes any sort of advantage either for that person or anyone else. These provisions also apply to former officers and employees and carry a maximum penalty of four years gaol or a fine up to $20 000.
A person who makes improper use of information or position is liable for any damage suffered by the association and must also pay the association any profit made [Associations Incorporation Act 1985 s 39A].
Keeping accounting records [Associations Incorporation Act 1985 s 39C; s49AC]
An incorporated association must keep accounting records that correctly record and explain the transactions and financial position of the association. If this is not done, both the association and any officer in default are guilty of an offence. The maximum penalties are $2500 for a prescribed association, and in other cases $1250. Section 49AC provides for more severe penalties where s39C was not complied with prior to the association winding up.
Securing compliance with the Associations Incorporation Act [Associations Incorporation Act 1985 s 57]
Officers of an association must take all reasonable steps to ensure the association complies with the Act. Failure to do so is an offence with a fine of up to $1250.
Falsification of records [Associations Incorporation Act 1985 s 58]
It is an offence for an officer, former officer, member or former member to falsify the books or records, including records in illegible form, of the association. 'Falsify' in this section has a broad meaning. The maximum penalty is $5000 or one year imprisonment.
Offences in relation to winding up, compromise with creditors, transfer of activities and dissolution [Associations Incorporation Act 1985 Part 5]
The relevant sections are 41B, 41D, 41E, 49AB, 49AC, 49AD, 49AF.
Every incorporated association must appoint a public officer, who must be a South Australian resident aged 18 years or over [Associations Incorporation Act 1985 s 56]. The public officer receives letters and notices sent by the Corporate Affairs Commission and must file returns and notices of rule and name changes with the Commission.
The public officer has no power over the management of the association simply because she or he is the public officer. However, the public officer must fulfil the duties applying to officers, SEE DUTIES OF OFFICERS.
The public officer does not have to be a committee member. However, the rules of the association may include the public officer as a member of the committee, or the committee may appoint one of its members to be the public oficer.
Subject to the rules of the association, the public officer does not have to be elected. The committee may simply appoint a public officer.
If a public officer changes address or is replaced, the association must give details to the commission, or may be fined up to $1250.
An association who does not have a public officer for more than one month may also be fined up to $1250.
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