Overview
This fact sheet is the third in a three-part series on incorporated associations. It sets out the main responsibilities of an Incorporated Association’s Management Committee. This factsheet applies to Queensland only.
The Management Committee
The Management Committee are responsible for the operation of the association and they are required to ensure that the rules of the association are followed and that the association complies with the law.[1] The exact duties and obligations may vary with the rules of the association, below are some of the main duties and responsibilities required of the committee members:
1 Accountability
Once a group or organisation becomes incorporated, the personal liability of its members is limited[2] – however, management committee members still have a duty to the association and when performing their duties they must act in good faith, use reasonable care and skill and advise the committee of any conflict of interest. They may be held personally accountable if they:
a) deliberately fail to act in the best interests of the associations;
b) abuse their powers as committee members;
c) fail to avoid conflicts of interest; or
d) fail to exercise due care, skill and diligence.[3]
There are waivers to this limitation when the organisation is operating for a member’s purpose and not the organisations and or there are issues of insolvency. Should you have concerns about these we advise you to seek further legal advice immediately.
2 Responsibilities
The Management Committee must also fulfil a number of legal responsibilities:
- control the business and operations of the association;
- ensure the association complies with its rules;
- ensure minutes of all committee and general meetings are kept;
- ensure an appropriate secretary is elected or appointed;
- ensure a copy of the incorporated association’s rules is available to all members;
- where applicable, keep public liability insurance current;
- ensure the incorporated association’s name appears on the common seal;
- ensure the incorporated association’s full name appears on all official documents such as advertising, business letters, accounts, official notices, publications, cheques and receipts;
- notify the Office of Fair Trading within one month of changes of office bearers (president, treasurer or secretary), the incorporated association’s postal address or the secretary’s residential address;
- ensure proper accounting records are kept;
- ensure the association’s financial affairs are audited or verified annually;
- ensure an AGM is held each year within six months of the end of the association’s financial year;
- ensure the audited or verified financial statements of the accounts of the incorporated association are submitted to members at the AGM; and
- lodge an annual return. [4]
Special Roles of the President, Secretary and Treasurer
1. President
The President normally chairs the management committee. [5]
2. Secretary
The Secretary is responsible for managing the records of the association and ensuring the procedures relating to meetings of the association are followed.[6]
3. Treasurer
The Treasurer is responsible for the financial management of the association, which includes responsibility for the association’s:
- asset register;
- petty cash balance;
- deposit and cheque books and receipt books;
- financial records;
- documentation relating to payments, such as receipts and invoices; and,
- prepare a end of financial year financial statement.[7]
Members and Meetings
The Management Committee must keep a register of members which, depending on the rules of the association, may have to be made available to members at all reasonable times. The Committee must also arrange and hold an Annual General Meeting once a year and a Management Committee meeting at least once every quarter and as often as necessary to properly manage the association. When organising a meeting the committee must adhere to the association’s rules.
These can include rules about:
- the notice period that must be given before meetings,
- how the meeting is called,
- what is on the agenda for the meeting,
- how many attendees are necessary to make decisions on the business of the meeting (the ‘quorum’ required)
- whether members can vote by proxy.[8]
Records must be kept of the minutes of every management committee meeting, general meeting and AGM. These must be made available to members on request, within 28 days.[9] The minutes must be accurate, and the Secretary is responsible for making sure this is the case.
Changing your association’s rules or name
To change its rules, an association must pass a special resolution at a general meeting and then, within three months of the resolution being passed, the Secretary must complete and lodge the Office of Fair Trading’s ‘Application to register an amendment of rules’ form and pay the applicable fee.[10]
An application to change the association’s name can also be made at any time within three months of a special resolution being passed, by lodging the ‘Application for registration of a change of name’ form, along with its original certificate of incorporation and the applicable fee.[11]
Public liability insurance
Public liability insurance is compulsory if your association owns or leases land.[12] Each year the management committee must review insurance requirements and report its findings at the AGM. The Management Committee should seek professional advice about the need for public liability insurance.
It is also best practice to take out liability insurance for the association and office bearers for any claims against them. If your organisation has staff and or volunteers it should also consider volunteer insurance.
Financial reporting
An incorporated association will be given a classification, based on the value of its current assets and revenue; either level 1, 2 or 3. Level 1 associations are those with the highest value assets and revenue and have the most rigorous auditing requirements.
Many associations formed from community groups or organisations will be level 3 associations. Level 3 associations are those with current assets of less than $20,000 and total revenue of less than $20,000.[13]
Details about the levels and requirements can be found below.
Your association’s financial statements must be verified by the president or treasurer who must prepare a verification statement to include the following: ‘The association keeps financial records in a way which properly records the association’s income and expenditure and dealings with its assets and liabilities’. [14]
Incorporated associations must also lodge annual tax returns. The relevant financial statements must be approved at the association’s AGM and signed by the president or treasurer. The annual return, along with the financial statements must be lodged with the Office of Fair Trading within one month of the association’s AGM. The return can be lodged online or by post. [15]
Further information
This factsheet is part three in a three-part series on Incorporated Associations in Queensland. You can access parts two and three below:
Part One: Incorporating Community Groups in Queensland
Part Two: Forming an Incorporated Association in Queensland
- The Office of Fair Trading has a detailed online guide on incorporated associations available here.
- For applicable operating fees visit here.
- Details about auditing levels and requirement can be found here.
- Office of Fair Trading’s ‘Application to register an amendment of rules’ form can be found here. The fee at the time of writing is $21.35.
- Office of Fair Trading’s ‘Application for registration of a change of name’ form can be found here. The fee at the time of writing is $80.50.
Contact
This factsheet is intended as a
plain English explanation of a particular area of law. Whilst all care has been
taken in its preparation, it is not a substitute for legal advice as legal
details have been omitted to provide a brief overview of this area of the law.
If you require legal advice relating to your particular circumstances, you
should contact EDO NQ or your solicitor.
References
[1] Associations Incorporation Regulation 1999 s 15.
[2] Associations Incorporation Act 1981 s 27.
[3] Common law fiduciary duties.
[4] See Associations Incorporation Act 1981 Part 7 and model rules.
[5] Model rules s 23(9).
[6] Associations Incorporation Act 1981 see s 69A.
[7] Associations Incorporated Regulations 1999 Schedule 5.
[8] See model rules.
[9] Associations Incorporation Act 1981 s 57B.
[10] Associations Incorporation Act 1981 s 48 2A.
[11] Associations Incorporation Act 1981 s 35 3)(b) and (c).
[12] Associations Incorporation Act 1981 s 70.
[13] Associations Incorporation Act 1981 s 58.
[14] Associations Incorporation Act 1981 s 59B
[15] Associations Incorporation Act 1981 see Division 2 for regulations of Financial reporting for incorporated associations.