This is the second of a series of legal updates that Kott
Gunning is producing throughout 2016 on the key features and
reforms under the new Associations Incorporation Act 2015
This instalment will deal with the Rules of Incorporated
Effect of Rules
The rules of an association bind both the association and each
member as if there was an executed written agreement between the
Requirements as to Content of Rules
Generally speaking the rules need to address and contain certain
particulars as required by the Act. These requirements are partly
contained in section 22, but are more specifically set out in
Schedule 1 to the Act. Some examples as to what matters need to be
addressed in the rules are:
name and objects of the Association;
qualifications for membership;
register of members, entrance and subscription fees;
membership and powers of the Management Committee;
election, term of office, record keeping, quorum and meeting
procedures for the Management Committee;
the quorum and procedure for general meetings;
time for notices of general meetings and motions, time
intervals between meetings;
the manner in which funds are controlled;
the manner for altering or rescinding the rules;
custody and use of the common seal and the books and
dispute resolution procedures; and
must include a statement that the property and income of the
association must be applied solely to achieve its objects or
purposes and not be distributed to its members, except in good
faith in the promotion of its objects or purposes.
The second point to note about the rules is that they must
otherwise be consistent with the Act.
An association may develop its own rules, adopt the Model Rules,
or use the Model Rules but with its own changes or
It is possible to seek exemption from compliance with section 22
by application to the Commissioner. It would be necessary to
demonstrate special circumstances to obtain such an exemption.
The Act requires that Regulations be made to prescribe the Model
Existing Rules made under the old Act
Upon commencement of the Act any existing rules that were in
force under the old Act will continue to be valid.
Pre-existing rules may be varied in accordance with provisions
in the Act allowing variation.
Rules failing to address Schedule 1 matter
If an association develops its own rules, and in doing so fails
to address a matter required under Schedule 1 then the Model Rules
will apply to the extent required.
Adopting Model Rules
An association can adopt the Model Rules at any time after its
incorporation under the Act by special resolution.
Upon adoption of the Model Rules an association must notify the
Commissioner and include in the notification the following
the name of the association;
the objects or purposes of the association;
the quorum for a general meeting of members of the
the quorum for a meeting of the management committee of the
if relevant, the period of the first financial year of the
Alteration of Rules
An association can alter its rules but only by special
The association must lodge the following documents with the
Commissioner within one month of making such a special
a notice of the special resolution setting out the
a certificate in approved form; and
a consolidated copy of the rules incorporating the
An association is liable to a penalty of $1,000.00 for a failure
Change of name by Alteration of Rules
An association can change its name by using the process for Rule
alteration, but the change will not take effect unless and until
the Commissioner approves the change.
The Commissioner can require publication of the proposed name
change prior to approving same.
Provision of Rules to Members
An association must keep and maintain an up-to-date version of
its rules and is liable to a penalty of $2,750 for a failure to do
On application by a member an association must make a copy of
the rules available for inspection, and must allow the member to
make a copy of an extract or the entire rules if required. There is
a penalty provision of $2,750 for a failure to allow a member the
right to inspect.
A member does not have the right to remove the rules for the
purpose of copying them.
An association must also and in any event provide a copy of the
rules to a member upon request and give to each person who becomes
a member a copy of the rules as in force at the time of
commencement of their membership. The association may not charge
the member for taking any action in compliance. There is a penalty
provision of $2,750 for a failure to comply.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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