Rules of association and by-laws
All groups applying to become an incorporated association are required to adopt and submit a set of rules of association (also known as the ‘constitution’) to Consumer Protection.
The rules of association regulate the overall management of the incorporated association. These rules provide for matters such as management committee elections, meetings and financial records, amongst others. The minimum matters that need to be dealt with in the rules are prescribed by the Act.
Significantly, an association’s rules may only be amended by means of a special resolution of the members.
However, an associations will often have additional needs and requirements that are specific to its organisation and day-to-day management that might also be included in its rules. To keep the rules of association simple and manageable, sporting associations in particular, often find it easier and more efficient to set up these additional rules as by-laws.
By-laws are secondary rules that expand on the rules of association and cover non-administrative matters that do not need to be included in the rules of association.
Typically, by-laws might deal with matters, such as the following:
- club colours
- uniforms and dress codes
- competition rules
- sporting fixtures
- player eligibility
- selection of players
- coaching regulations
- supply of liquor
- a code of conduct
In order for by-laws to be lawfully effective the rules of association should include a simple clause, referring to the addition and amendment of by-laws.
The management committee shall have the power to make, alter and rescind any by-laws that it considers necessary for the effective administration of the association, provided that no by-law may be inconsistent with the rules of association.
Authorising the committee to make and change by-laws means they can be kept relevant and current without the need for approval by members at a general meeting. It is important that members are kept informed of any amendments – no less frequently than at each Annual General Meeting. There is also no legal reason why changes to by-laws should not be under the control of the members, if that is desired. The by-law clause in the rules would need to reflect that.
Note: apart from the clause that authorises them, the by-laws themselves are not intended to form a part of the rules of association that are subject to the Act. By-laws are separate from the rules and can be easily amended within the association.
Do not attach by-laws to rules that are submitted to Consumer Protection. If they are, it is possible they will become legally part of the rules. They can only be amended by a special resolution of members and then lodged with Consumer Protection before they become effective. This undermines one of the primary reasons for establishing by-laws.
The Department of Local Government, Sport and Cultural Industries - Sport and Recreation has a useful website that provides an example of a constitution (rules) specifically designed for sporting groups.
Department of Local Government, Sport and Cultural Industries - Sport and Recreation: