2. Cancellation of an incorporated association
In those all too frequent instances where members simply walk away from an association without winding it up, the Commissioner may direct that the incorporation of the association be cancelled. The Act provides this discretion where the Commissioner has reasonable cause to believe that the incorporated association, among other things, has been inoperative for the preceding 12 months or has fewer than six members.
Where the incorporation of an association has been cancelled, any property of the association vests with the Commissioner. The Commissioner then has an obligation to distribute this property in accordance with the Act, and this is usually a very time consuming process. Recent examples of property distributed by the Commissioner include real estate valued at more than $1.2 million, and cash amounts well in excess of $100,000.
Depending on the circumstances, former members of the defunct association may have little say in how such property is distributed, although extensive efforts are made to find and consult them.
Properly winding up an association is the best way to ensure that its assets and property are distributed according to the wishes of the members.