Altering the rules

Over the life of an association it is likely that rules will change, if only to keep step with changes in society.  For example, changes in social attitudes (and laws), discrimination or technological advances such as email could mean that some rules need to either be amended or improved upon.  Consumer Protection recommends as best practice, associations should review their rules every three to five years and amend them as needed.

The legal process for altering the rules of an association is relatively straight forward.  This chapter describes the requirements for altering the rules and for ensuring that those alterations are legally effective.

Key Points

  • An association can only change its name, objects or the rules of association at a general meeting by means of a special resolution.
  • Notice of each special resolution to be considered at the meeting must be provided to members in accordance with the existing rules. 
  • The special resolution(s) must be passed by a majority of 75% of members voting and be lodged with Consumer Protection within one month after being passed.
  • The Commissioner for Consumer Protection must approve all changes that are made to an association’s rules that result in a change of name or objects or purposes.

A step-by-step guide

An association can only change its rules by passing a special resolution at a general meeting. The Meetings section provides an introduction to the concept of a special resolution.

The main steps in changing an association’s rules are to:

  • determine what amendments are going to be made;
  • ensure the amendments comply with the Act and draft a new copy of the rules;
  • send notice to all members stating in full all proposed special resolutions to be voted on, the time and place of the general meeting where the proposed special resolutions will be moved;
  • convene general meeting of members to consider the amendments;
  • pass the amendments by one or more special resolutions; and
  • notify Consumer Protection of the changes within one month of the meeting.

What changes are needed?

There are many reasons why associations need to make changes to their rules. In most cases the rules no longer serve the changing needs of the association or they are ineffective in dealing with issues faced by the association or they are simply out of date.

Committee members normally have the task of planning changes to the rules of the association. Some useful resources available to assist in this task include:

  • The rules of every association incorporated in Western Australia are a public record available from Consumer Protection for either inspection or purchase for a fee. The rules of associations with similar objects or purposes to your own may provide helpful examples of new provisions or improved wording.
    An application for a copy of any association’s rules can be made using AssociationsOnline. Simply search for the association name and follow the prompts to submit the document request.
  • Schedule 1 of the Act lists all of the matters that must be provided for in the rules of all incorporated associations. These matters can also be viewed in the Act itself.

Using the Model Rules

The Model Rules are a complete set of rules prescribed by the Associations Incorporations Regulations. The Model Rules include provisions relating to all Schedule 1 matters except for:

  • the name of the association;
  • the objects or purposes of the association;
  • the quorum for a general meeting of members of the association;
  • the quorum for a meeting of the management committee of the association; and
  • the period of the first financial year of the association.

If an association decides to adopt the Model Rules it will only be necessary to prepare information in relation to these matters.

Note: If the association changes any of the provisions in the Model Rules (with the exception for the matters above) it is no longer considered to be using the Model Rules.

Do the rules comply?

All incorporated associations are expected to comply with the provisions of the Act and their rules must be consistent with those provisions.

To check that your association’s proposed rules will be consistent with the Act, in particular Schedule 1, refer to the checklist included at the end of the chapter on Becoming an Incorporated Association.

Where an association’s rules do not include all of the Schedule 1 requirements the relevant part in the Model Rules will automatically apply until corrected by the Association (please note this will not occur until after the end of the three transition periods).

Do the changes meet your association's other obligations?

Depending on the association’s activities there may be other matters that need to be included in the rules.  An association should be careful that any changes made to the rules do not affect its eligibility to hold certain licences, receive taxation endorsements or alter any funding arrangements were already in place.

In some situations, associations may also need to have the changes endorsed by outside bodies (for example a national body or other government department) before presenting them to members for a vote or lodging with the Department of Commerce.  

If in doubt, contact the relevant authorities to discuss the proposed changes.

Liquor licences

Associations who hold a liquor licence are required to include particular information in their rules and submit the rules to the Department of Local Government, Sport and Cultural Industries - Racing Gaming and Liquor.

Further information about the requirements under the liquor legislation is included in the Directors Policy, ‘Club Constitutions – Club and Club restricted Licences’ or by telephoning (08) 9425 1888.

Parents and citizens associations and school councils

All Western Australian Council of State School Organisations (WACSSO) affiliated associations are governed by a single standard constitution which has been approved by the Western Australian Minister for Education, which is required under sections 145 and 146 of the School Education Act 1999.

WACSSO is in the process of providing a revised constitution and will be providing instructions to affiliated associations shortly.  For information please contact WACSSO on telephone 9264 4000 or info@wacsso.wa.edu.au.

Taxation concessions

Groups holding charity tax concessions or other tax exemptions may be required to include certain information in their rules. If this applies to your association may wish to visit the ACNC website for more information.

Calling the meeting

To validate an alteration of the rules, the association must follow the correct procedure in calling a meeting.

Note: The meeting must be a general meeting. All members of the association, whether they have voting rights or not must be given notice of the meeting and invited to attend. Under the Act, the rules of an association cannot be changed without all members being advised.

The association must give notice to all members of the time, date, venue and purpose of the general meeting. A meeting may become invalid due to insufficient notice.

Sometimes the rules provide for a longer notice period for a meeting where a special resolution is to be considered. The notice should state in full the proposed special resolution(s) to be voted on at the meeting. It is good practice to also include an explanation of why the changes to the rules are being proposed to members.

Please note that it is important that the words ‘special resolution’ appear as part of the notice.

Again, if insufficient notice is given in accordance with all of the above, the special resolution will have no effect.

Occasionally associations may wish to make many changes to its rules making it complicated to list every change individually. In this case, it is appropriate to provide each member with a copy of the complete new rules as they will appear after approval. The notice of special resolution might then read: ‘It is proposed to adopt the attached rules in place of all of the existing rules of XYZ Association (Inc).’

If your association’s rules provide for proxy or postal voting the relevant forms need to be forwarded to members with the meeting notice. Meetings provides more information on this topic.

A special resolution

Firstly, the committee needs to ensure a quorum is present at the meeting. The special resolution(s) need to be moved in the same way as any other resolution.

For example:

'I move that rule 5 be changed to read ……..’

Moved: John Robertson

Seconded: Vicky Nichols

The association must ensure any resolution(s) to adopt altered rules is passed by the required majority. A special resolution needs at least 75% of members voting in person or (if permitted) by proxy or postal vote, to vote in favour of the rules being altered in the manner proposed.

Note: This means only 75% of those members present at the meeting who are eligible to vote is required.

A special resolution to alter the rules must be lodged with Consumer Protection to have effect.

Lodging the changes

For legal effect, an association must lodge any changes to its rules by special resolution within one month of passing the resolution with the Commissioner for Consumer Protection.

Changes to rules can be lodged through AssociationsOnline with the applicable fee. There is a step by step video available if you need help lodging the application using the system.

Associations not submitting changes on time may request the Commissioner allow the changes to be lodged outside this time limit by outlining the reasons for the delay.

Note: The Commissioner may agree to accept the request. Even with very good reasons, extensions are generally allowed for a maximum of three months. If the Commissioner does not agree to an extension it will be necessary to start the process all over again by calling another general meeting.

When sending amendments to Consumer Protection remember to:

  • Submit the documents within one month of the date of the meeting.
  • Complete the application in full and sign the declaration.
  • Pay the correct fee.
  • Attach a complete copy of the amended rules and complete the Schedule 1 matrix or statement that the association is adopting the model rules and providing the necessary information.
  • Keep a copy of all the documents submitted, including the proposed alterations to the rules. Consumer Protection does not provide a final copy to the association.

It is important to note that the new rules do not take effect until the notice is lodged with and confirmed by Consumer Protection.

Consumer Protection will send a confirmation of the lodgement and the date when the altered rules will take effect. This means that the new rules cannot be used until this notification is received. In the past, some associations have altered its rules in one part of a meeting, and then used the altered rules later on in the meeting, for example in an election of office bearers. It doesn’t work that way.

Altering the objects of the association

An association can alter its objects or purposes provided the legal requirements are complied with for passing the changes. These requirements are the same as those discussed above for changing the rules. An association’s objects form part of its rules, so a change of objects is effectively a change of rules.

A special resolution must be passed by at least 75% of members voting at a general meeting of the association held in accordance with the rules.

Remember, this does not mean 75% of all members of the association only of those present and eligible to vote.

If the special resolution is passed, the changes must be lodged with the Commissioner of Consumer Protection within one month of the special resolution in order for the resolution to have legal effect.

If the association is an enrolled user, the application can be lodged using AssociationsOnline. The application must be submitted with payment of the relevant fee.

The Commissioner is also required by the Act to approve the change to the objects or purpose. The Commissioner may instruct the association to publish a notice of the proposed change of the objects or purposes of the incorporated association before approving the change.

Should the Commissioner refuse to approve an alteration of the objects and purposes of an incorporated association. The incorporated association may within 28 days of receiving notice of the refusal:

  • apply to the State Administrative Tribunal (SAT) requesting a review of the decision of the Commissioner; and
  • make submissions in writing to SAT to support the application.

The SAT decision may be appealed in certain circumstances, usually on a point of law. Further information is available on the SAT’s website.

Changing the association's name

Sometimes associations decide they need to change the name of the association. Perhaps the name no longer reflects the nature of the group or there is a desire to change direction and marketing.

This decision should not be taken lightly, as it can have long-term effects on public perceptions. For some members, a name change is insignificant and may merely reflect a change in the way the association has moved. It may be considered a strategic, business or public relations decision. However, for an association with a long history the name is part of that history. Some members may no longer feel the association has a connection with them if the name is changed.

Requirements for changing the name

  1. The new name could be rejected if it is the same or very similar to another name.  Consumer Protection holds a register of names and can conduct a name search.  The Commissioner will only approve a name change if he or she is of the opinion that the name is appropriate.
     
  2. To change the name of the association requires a special resolution by the members passed at a general meeting. An association’s name actually forms part of its rules, so a change of name effectively requires a change of rules. The procedure is the same as that as previously discussed.
     
  3. Within one month of passing the special resolution, the association must lodge the notice of the special resolution with the Commissioner. Once again, associations can submit the notice to Consumer Protection using AssociationsOnline. A copy of the association’s rules with the new name should accompany the application.
     
  4. Legally, the association has not formally altered its rules and changed its name until the notice of the special resolution is lodged with the Commissioner and he or she approves the name change. The Commissioner may instruct the association to publish a notice of the proposed name change before approving the change.  Until the name is approved by the Commissioner in writing, DO NOT:
    • use the new name;
    • arrange for the printing of new signage, letterheads, business cards, etc.;
    • change bank account and/or insurance policy details;
    • notify the tax office (do you need a new ABN? - check);
    • notify essential services;
    • notify creditors; or
    • notify members, clients, customers, etc.
       
  5. The Commissioner will issue a new certificate to show the new name and date of registration.
     
  6. For a period of time the association may choose to include the old name on all correspondence (‘formerly XYZ Inc’) until people become familiar with the new name.

What happens if the name change is not approved?

The Commissioner will not approve a name unless he or she is of the opinion that the proposed name is an appropriate name under which an association might be incorporated under the Act.

As with the original approval of the name, the Commissioner for Consumer Protection may reject a proposed change of name if it is:

  • already in use;
  • offensive or undesirable;
  • likely to mislead the public; or
  • likely to be confused with the name of an existing body corporate or registered business name.

If the Commissioner refuses to approve the change of name the association may request a review of the decision by applying to the SAT. If seeking a review, sound reasons need to be given why the association wants to change the name.

The association must make the review application within 28 days of receiving notice of the refusal.

Sample Form - Notice of General Meeting to Alter the Rules

Sample Notice of General Meeting to Alter the Rules

A sample notice to use if an association is seeking to convene a general meeting to alter the rules of the association.

Download the sample Notice of General Meeting to Alter the Rules