The End of the Road
This chapter sets out the procedure for ending the incorporation of an association. It also discusses the alternative forms of incorporation and how associations could arrange to transfer their jurisdiction.
- An incorporated association may end its incorporation by applying for voluntary cancellation or by winding up either voluntarily or by order of the Supreme Court.
- An association can apply for voluntary cancellation if it is solvent (has no outstanding debts or other legal liabilities) and resolves by special resolution to apply for cancellation.
- If an incorporated association has surplus property when it is cancelled, it must prepare and submit a distribution plan to the Commissioner for approval. The distribution plan describes how the surplus property is to be distributed. It is recommended that an association wishing to cease it's activities resolves its affairs as far as possible before applying for cancellation.
- An association may also transfer to another form of incorporated structure. These include registering as a company, an Aboriginal or Torres Strait Islander corporation or a co-operative. The main distinctions are the purpose of the organisation and whether or not profit is to be distributed to members and if so, to what extent.
For many associations, there comes a time when the members just want to call it quits and cease the activities of the association. Sometimes they simply walk away, leaving the incorporated entity in place without any action to bring its life to an end.
A much better option is to take formal steps to dissolve the association’s incorporation. Cancellation is the process by which the incorporation of an association as a separate legal entity is ended. The process involves finalising any contracts, paying debts and distributing property.
However, cancellation may not be the most suitable course for the association at the time.
In some circumstances it may be more appropriate for the members to consider a different form of incorporation. For example, as a company or for Indigenous groups, an Aboriginal or Torres Strait Islander corporation.