Under section 18(1) of the Associations Incorporation Act 1985 (SA) an association is eligible to be incorporated if formed for:
- a religious, educational, charitable or benevolent purpose
- promoting or encouraging literature, science or the arts
- providing medical treatment or attention, or promoting the interests of people suffering from a particular physical, mental or intellectual incapacity
- the purpose of sport, recreation or amusement
- establishing, carrying on or improving a community centre or promoting the interests of a local community or a particular section of a local community
- conserving resources or preserving any part of the environmental, historical or cultural heritage of the State
- promoting the interests of students or staff of an educational institution
- political purposes
- promoting the common interests of people engaged or interested in, a business, trade or industry
- administering a scheme or fund for paying superannuation or retirement benefits to members of any organisation or the employees of any incorporated body, firm or people (with the Minister's approval)
- any other purpose approved by the Minister.
The Minister's approval is also required for the incorporation of an association that has a main object of making a profit for its members or to engage in trade or commerce. However many non profit associations engage in trade for ancillary fundraising purposes, and approval is not required for this.
To apply for incorporation, a person authorised by the association must fill in the form called 'Incorporation of an Association Application'. This form must be sent to the Corporate Affairs Commission, which is part of Consumer and Business Services, along with:
- the form called 'Statutory Declaration to Accompany Application for Incorporation' that verifies that the applicant is authorised by the association to apply for incorporation, that the details in the application form are correct and that the copy of the rules is a true copy (this form must be declared by the applicant before a justice of the peace or a solicitor and be attached to the copy of the rules)
- the form called 'Checklist for Proposed Rules of an Association'
- a copy of the rules (constitution) of the association
- copies of any trust instruments of the association (the application form indicates what sort of trust instruments must be copied and sent in);
- the application fee (see Associations Incorporation Regulations 2008 (SA), item 6 of Schedule 2) .
See also the Consumer and Business Services publication 'How to incorporate'.
The Corporate Affairs Commission can refuse to incorporate an association if it believes that the association's activities could be carried on better by a body incorporated under another Act. With the consent of the Minister, it can also refuse to incorporate an association if it believes it is in the public interest to do so.
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.
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)]
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.
Incorporated associations must have rules, which are sometimes called a constitution. The rules are binding on the association and its members. Some associations have a further set of more detailed rules - called by-laws, ordinances or rules - that deal with administrative or procedural matters. These are also binding on the association and its members. The rules (including alterations to rules) must be sent to the Corporate Affairs Commission (part of Consumer and Business Services) for registration (this does not apply to the more detailed rules or by-laws). The rules of an association must:
- state the name of the association and set out its objects
- not contain any provision contrary or inconsistent with the Associations Incorporation Act 1985 (SA)
- contain provisions dealing with:
- membership (if the association has members)
- the powers, duties and manner of appointment of the committee
- appointing an auditor, if it is a prescribed association
- how general meetings are called and what procedure must be followed at the meetings
- who has the management and control of the funds and other property of the association
- the powers of the association and by whom and in what manner they may be exercised
- how the rules of the association may be altered
- any other matter prescribed by Regulation.
A example of rules that can be adapted to suit your organisation is available from the Consumer and Busness Services website - but note that it mainly applies to groups with a general membership and a committee structure.
Alterations to the rules
An incorporated association may change its rules using the method set out in its rules. If its rules do not cover how to make changes, then section 24 of the Associations Incorporation Act 1985 (SA) applies, which states that the rules may be changed by special resolution of the association. 'Special resolution' is defined in section 3 of the Act. It is a resolution where 21 days written notice of the resolution has been given to all members, and where it has been passed by a three-quarters majority of members present at the meeting.
Within one month of making any alteration to its rules, an incorporated association must register the alteration with the Corporate Affairs Commission. If it does not, the association can be fined up to $1250.
An alteration to the name of an incorporated association does not come into force until it is registered. However, any other alteration comes into force at the time the alteration is passed, unless the rules or a resolution of the association state otherwise.
To register an alteration, the association must fill in the form called Registration of Alteration to Rules (form 6) and send it to the Corporate Affairs Commission (Consumer and Business Services) along with:
- a Statutory Declaration Verifying Alteration to Rules form (form 7), which must be completed by the public officer (see Public Officer) or a committee member
- the application fee (a late fee may apply if the application is not made within the required time (one month from when the change was made).
The forms are available online, and free of charge from the website of Consumer and Business Services.
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.