Transferring to another jurisdiction
The Commissioner for Consumer Protection has authority to approve an incorporated association’s transfer into a company limited by guarantee, an Aboriginal Corporation or a Co-operative.
Steps for transfer of incorporation
- Decide on the whether the change of corporate structure is suitable and obtain approvals if relevant, from government funding agencies, affiliated bodies or accreditation bodies or any other entities where existing statutory or contractual obligations are currently held.
- Send a notice in accordance with the current rules of the meeting to transfer incorporation by special resolution to ALL members, whether they have voting rights or not.
- Convene the meeting and pass the changes by special resolution.
- Submit the application for approval to transfer incorporation under another law using AssociationsOnline and a copy of the special resolution within one month of the meeting. The application should be accompanied by the prescribed fee and the following information:
- a statement as to the reasons for the intended transfer;
- a statement as to whether the entity to which the association intends to transfer is subject to rules that prohibit the distribution of profits to that entity’s members;
- a statement declaring that the association’s creditors are not likely to be materially prejudiced by the transfer; and
- if the association receives funding, evidence that the association’s funding bodies have been advised of the proposed transfer.
- If approval to transfer is granted, make an application within the approved timeframe to the relevant regulatory body.
- Once registered with the relevant regulatory body, submit to the Department copies of the certificate of registration.
Things to consider before transfer
A change in corporate structure from the Associations Incorporation Act 2015 to the Corporations Act 2001 (Corporations Act) may affect any existing statutory or contractual obligations with government funding agencies, affiliated bodies or accreditation bodies.
Any existing property, rights or obligations may not be recognised despite section 100(2) of the Act which provides that transfer of incorporation does not affect the identity of the association which is to be taken to be the same body before and after the transfer of incorporation.
Consequently associations should consider what approvals, if any, they should obtain before calling a general meeting of members to consider a change in corporate structure.
Associations are responsible for making their own enquiries as the Department of Commerce cannot do so on their behalf. Associations should consider obtaining legal advice before embarking on this process.
Examples of arrangements which may be affected and notifications which should be made or approvals sought are:
- Associations that have been appointed as trustee of trust land or hold a lease should contact the relevant regulatory body to ensure their tenancy arrangements will not be affected by their proposed change of corporate structure.
- Associations that own land should make enquiries as to the process of updating the title to reflect the change of corporate structure.
- Associations that have gaming or liquor licences should contact the Department of Local Government, Sport and Cultural Industries - Racing, Gaming and Liquor to ascertain if their licences will affected by their proposed change of corporate structure.
- An association legislated under the School Education Act 1999 (WA). For example school councils, non-government schools, parents and citizens’ may require prior approval from the Minister of Education prior to passing the passing of the special resolution to transfer.
Important Information about applying to transfer to a company limited by guarantee
It is recommended that associations seeking to transfer to the Corporations Act 2001 should first apply to Australian Securities and Investments Commission (ASIC) to reserve the name before submitting the application.
Once the application for approval to transfer incorporation under another law has been approved by Consumer Protection. An application using the ASIC Form 202 - Application for registration of a body corporate as an Australian company must be made.
You should ensure that the company limited by guarantee complies with the reporting and regulatory requirements of the Corporations Act. Detailed information on the requirements of setting up and running a company limited by guarantee can be found on www.asic.gov.au. ASIC should be contacted for further information.
Although the transfer process is relatively straightforward, there are several steps required and it is recommended that associations first contact the Consumer Protection Associations Branch on 1300 30 40 74 to find out how best to proceed.