The law in Western Australia applying to incorporated associations is likely to change on and from 1 July 2016. The Associations Incorporation Act 1987 (WA) will soon be replaced by the Associations Incorporations Act 2015 (WA) (New Act).
The New Act represents a major overhaul of the law applying to Incorporated Associations in Western Australia and will, in most cases, require Associations to update or replace their constitutions (Rules).
Although a transitional period of 3 years will apply for associations to update their Rules, the majority of the New Act will take effect for all Associations from the date of commencement.
The New Act makes important changes to; financial reporting, governance, privacy, constituent rules and membership provisions. For example, the New Act has a three-tier financial reporting and accountability system based on revenue.
- Tier 1 Associations having revenue of less than $250,000 may elect to prepare financial statements with no independent review or audit;
- Tier 2 Associations which have revenue of $250,000 up to $1,000,000 must prepare financial reports that give a true and fair view of the financial position of the association in accordance with Australian Accounting Standards and those reports must be reviewed by a member of a professional accounting body; and
- Tier 3 Associations having revenue of more than $1,000,000 must prepare financial reports that give a true and fair view of the financial position of the association in accordance with Australian Accounting Standards and those reports must be audited by a member of a professional accounting body who holds a public practicing certificate.
Other important features of the New Act include specifically identifying the legal obligations of the committee and executives which were previously not specified. They include; a duty of care and diligence, a duty to act in the best interests of the Association and for a proper purpose, and a duty not to misuse their position or information.
Want to act now and get your Association and its Rules in order before 1 July this year to avoid breaching the New Act? Talk to Martin Tuohy about preparing your organisation for the changes. Email martin@equitaslawyers.com.au
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