Major Reforms to Victorian Incorporated Associations Regime

Specialist legal service for community organisations, PilchConnect, has released its submission in response to the draft Associations Incorporations Bill 2010 – proposed to commence in the second half of 2011.

Consumer Affairs Victoria released the draft Association Incorporation Amendment Bill 2010 in early March 2010, which proposes comprehensive changes to Victoria’s Association Incorporation Act 1981.

PilchConnect’s Senior Policy Officer Sue Woodward says the Bill outlines phase 2 of the government’s proposed reforms and if passed, will introduce significant changes for the 35,000 plus Not for Profit groups that are incorporated as Victorian associations. She says many of these organisations are small, volunteer run community groups.

According to PilchConnect, the major reforms proposed by the Bill include new provisions on:

• the duties of committee members
• member rights and responsibilities
• grievance and dispute resolution procedures
• removal of the limitations on trading by an incorporated association, and
• revised (3-tiered) annual reporting requirements and audit thresholds.

Woodward congratulated CAV on parts of the Bill which introduce some long-awaited reforms to the Act, in particular the removal of the complicated trading prohibition sections

Woodward says PilchConnect wants to ensure that key provisions are understandable for volunteer committee of management members, and that the proposals work for Victoria’s NFP sector – particularly the small to medium NFPs that continue to struggle with the regulatory compliance burden.

Amongst the concerns PilchConnect raises in the submission are:

• Concern with the current drafting approach – particularly in relation to applied civil penalty provisions of the Corporations Act 2001. PilchConnect suggests that the current complicated and legalistic approach is not in line with the original intention that the Act be a simple and inexpensive means by which unincorporated Not for Profit associations may obtain corporate status.
• Changes to the Act will mean the model rules for incorporated associations contained in the Association Incorporation Regulations 2009 (Vic) will need to be re-drafted. PilchConnect is concerned to ensure the new model rules are drafted in clear, logical and plain language so they can be easily understood by all organisations.
• When the Bill is passed, there will need to be an extensive community legal education campaign about the effect of the reforms on associations, far enough ahead of time to ensure that Victoria’s NFP sector is able to comply with the proposed changes.

PilchConnect will soon release an easy overview for community groups to explain the main changes in the Bill.

To view the submission in full, click here.

*UPDATE (10/05/2010) – PilchConnect have published a guide to provide Victorian community organisations with an overview of the proposed changes, which are set out in the Associations Incorporation Amendment Bill 2010 (Vic).  To view the guide, follow hte link: http://www.pilch.org.au/AIA_Bill2010/