Consequences of incorporation

The following are some of the most important consequences of incorporation under the Associations Incorporation Act 1985 (SA).

Note: the Corporate Affairs Commission (referred to below) is part of Consumer and Business Services.

Perpetual Succession [s 20(3)(a)]

Upon incorporation, the association becomes a body corporate with perpetual succession, meaning it can continue to exist indefinitely, regardless of changes to its membership.

Common Seal [s 20(3)(a)]

An incorporated association must have a common seal. For more information about this, see Powers of incorporated associations.

Corporate Name [s 20(3)(a), s 65]

The association's name is chosen by the association, but must be approved by the Corporate Affairs Commission, and is the corporate name appearing on the certificate of incorporation sent to the association by them. The word 'Incorporated' is part of the association's name and must come at the end of the name. The abbreviation 'Inc.' may be used.

Property [s 20(3)(b)]

The ownership of all real and personal property of an unincorporated association is automatically transferred from the members and the trustees, if any, to the newly incorporated association (subject to any trusts that may affect the property). However, it may still be necessary to register these changes separately (for example, land held by trustees must be transferred to the association and this must be registered at the Lands Titles Office).

Rights and Liabilities [s 20(3)(c), s 21]

The rights or liabilities of an organisation continue and are not 'wiped out' when it incorporates. Any contracts the association was involved in continue to operate. Although members are not personally liable for debts of an incorporated association (unless the rules of the association provide for some liability), they will still be responsible for debts incurred on behalf of the association before incorporation. Members can be required to contribute to the payment of these prior debts.

Profits for members[s 55]

An incorporated association must not make profits for any member of the association or for any associate of a member without the approval of the Corporate Affairs Commission. An association must not pay any money to a member (or any associate of a member) without the Commission's approval. The exceptions to this are reasonable payments for work done for or on behalf of the association, or payments that are incidental to activities carried on by the association in accordance with its objects.

Consequences of incorporation  :  Last Revised: Fri Aug 9th 2013
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