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:
- review the current version of your rules to determine what amendments are needed. This is usually the time to consult with your members and get their feedback;
- prepare an updated copy of the rules and ensure the amendments comply with the Act;
- convene a general meeting of members to consider the proposed amendments;
- send written notice to all members stating in full all proposed special resolutions to be voted on and the time and place of the general meeting where the proposed special resolutions will be moved;
- include details of the proposed changes to the rules with the notice so members are aware what they will be expected to vote on;
- pass the amendments by one or more special resolutions (75% majority of members who cast a vote); and
- lodge the changes with Consumer Protection within one month of being passed.
Consumer Protection has developed useful resources to assist associations when reviewing the current rules and ensuring they are compliant:
- Schedule 1 checklist (page 8 of Rules Workbook)
- The model rules
- What’s in the rules: Explaining the Schedule 1 requirements
- Video: Review the rules
Using the model rules
The model rules are a complete set of rules prescribed by the Associations Incorporations Regulations 2016 that may be adopted. The model rules cover all the matters required under the Act and only require the association to provide:
- 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.
While not compulsory, the model rules greatly reduce the work involved in preparing new rules, whether you adopt them in their entirety or use them as the starting point to develop your own rules.
Do the rules comply?
The rules are required to be consistent with the Act, including the 19 matters specified in Schedule 1. Before the new rules are presented to members for approval the committee should complete an assessment to confirm that all of the Schedule 1 matters have been addressed. Refer to the checklist included at the end of the Rules Workbook.
IMPORTANT: If an association’s rules did not include all of the Schedule 1 requirements, the relevant clause in the model rules is deemed to apply until the deficiency is corrected.
Do the changes meet your 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 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 and lodging with Consumer Protection. If in doubt, contact the relevant authorities to discuss the proposed changes.
Calling the meeting
The special resolution to change the rules can only be passed at a general meeting of the association. All members, whether they have voting rights or not, must be given written 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 notice must include:
- the time, date, venue and purpose of the general meeting;
- the full wording of the proposed special resolution(s) to be voted on at the meeting; and
- sufficient information about the changes to enable members to make an informed decision.
If the association is adopting a new or substantially different version of the rules a full copy of the new rules is to be included with the notice.
If notice is not given in accordance with all of the above, the special resolution may have no effect.
If your current rules provide for proxy or postal voting the relevant forms should be forwarded to members with the meeting notice or in accordance with any process specified in the rules. Meetings provides more information on this topic.
A special resolution
Before commencing the meeting the committee needs to ensure a quorum is present. The special resolution(s) can then be moved in the same way as any other resolution.
Any resolution(s) to alter the rules must be passed by a majority of at least 75% of members voting in person at the meeting and (if permitted) by proxy or postal vote, to vote in favor of the proposed alterations.
A special resolution does not require 75% of the total membership to vote in favor of the change. The video Voting on the changes provides step by step instructions for passing a special resolution
Lodging the changes
A special resolution to alter the rules must be lodged with Consumer Protection within one month of passing to have effect. The application 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.
Applications lodged late will incur additional fees and need to include an explanation for the delay. If the Commissioner does not allow an extension, it will be necessary to start the process all over again by calling another general meeting.
Remember: Keep a copy of the documents submitted as Consumer Protection does not send back a copy to the association once processed.
You will receive written confirmation of the lodgment from Consumer Protection that includes the date the changes take effect. The new rules cannot be used until this notification is received. Therefore, an association cannot alter the rules and then use the new rules later in the meeting.