Fact Sheet 14
Incorporating an Environment Group
in the A.C.T

This fact sheet provides a brief overview of the Associations Incorporation Act 1991 (ACT) explaining the benefits of incorporation and how to incorporate in the ACT.

What does it mean ‘to incorporate’?
Incorporation is a form of registration that gives an association or community group certain legal advantages in return for accepting certain legal responsibilities. Incorporation of an association means that the group becomes a legal entity in its own right, separate from the individual members.

In the ACT it is most usual for environmental groups to become incorporated associations under the Associations Incorporation Act 1991 (ACT). Another, but less common, alternative is to establish a company under the Corporations Act 2001 (Cth). The former is a simpler process, resulting in an entity that is less costly to create and maintain, has less ongoing regulatory requirements and for which the penalties for breaching any regulatory requirement are not as severe.

Why incorporate your group ?
Incorporating allows an organisation to:
• create a legal entity separate from the individual members;
• provide a certain amount of limited liability for members;
• continue to exist regardless of changes in membership;
• enter into enforceable contracts including buying and selling property;
• sue and be sued in the corporate name;
• attract funding more easily; and
• apply for status as a charity or formally register as an environmental organisations.
Incorporation can also be very useful if your group contemplates the possibility of legal proceedings to enforce environmental laws, particularly within the ACT, where the law of standing (the right to bring proceedings before Courts and Tribunals) is often more restrictive than in NSW.

Incorporation benefits individual members of the association by protecting them from legal liability for the actions of the incorporated association. If an association is not incorporated, legal obligations are the responsibility of individual members.

While incorporation does provide protection to board and committee members, it does not entirely prevent individuals from being sued for certain acts, such as negligent acts. A committee member may negligently give some wrong advice, request someone to perform a dangerous task or could dismiss staff without proper authority or process. Where such wrongs can be proven the personal assets of negligent board and/or committee members may be seized to meet any damages. This is why some Associations take out Directors and Officers liability insurance.
Some legal risks potentially exist whether your group is incorporated or not. It is worthwhile keeping things in perspective and considering the benefits of incorporation.

Offsetting the advantages of incorporation are:
• the costs, both financial and administrative, of creating and maintaining the incorporated entity; and
• the risks associated with being a director or office bearer of an incorporated entity, which are similar to those of being a director of a company.

Who is eligible to incorporate?
Under the Associations Incorporation Act an association is eligible for incorporation if it meets the following requirements:
• has at least five members and is formed to carry on a lawful purpose without financial gain for its members;
• a constitution to set out the group’s aims and objectives and rules on how it will function;
• a public officer to be the legal face of the group and to lodge documents at the Registrar-General’s Office;
• an auditor to check the financial affairs of the group; and
• a committee to organise the activities and manage the finances of the group.

What do we need in order to Incorporate?

Rules of the Association
If you have decided to incorporate it is necessary to define your objectives carefully. These objectives or “Objects” will be included within the Rules of the Association.

An association may -
• adopt the model rules set out in the Schedule to the Regulations; or
• compile its own rules.

Clarifying the Objects of an Association is necessary mainly for the status benefits that incorporation provides in relation to (a) litigation and (b) fundraising and charitable association status.

If an association decides to compile its own rules it must ensure that the matters listed in Schedule 1 of the Regulations are included otherwise the model rules apply to those specific matters omitted from the compiled rules. These Rules may be altered by "Special Resolution". The members of an association are bound by its rules and therefore should be familiar with them.

What other things do we need?
a. Public Officer
• An incorporated association must appoint a public officer.
• The appointed public officer must be an ACT resident of at least 18 years of age.
• If the address of the public officer changes, the Registrar-General's Office must be notified within 1 month (s.59).
• If the public officer vacates the position, the committee is required to appoint a replacement within 14 days (s.64 (3))

b. Committee
• An incorporated association must have a committee made up of at least 3 members of the association.
• Appointments to, or vacancies in, any position on the committee must be notified to the Registrar-General.
• If a committee member has any direct or indirect pecuniary interest in a contract or proposed contract to which the association is or may be a party the committee member shall disclose that interest.

c. Register of Members
• An incorporated association must keep and maintain a register of its members.
• The register must be made available for inspection by members.

d. Annual General Meetings
• In addition to any other meeting that an incorporated association may have it must hold an annual general meeting once a year.

e. Accounts, presentation of accounts, audit and annual reports
• An association must keep accounting records so that true and fair accounts may be prepared.
• At each annual general meeting, the following documents must be presented by the committee for consideration:
- the audited statement of accounts for the most recently ended financial year. The statement must not be misleading and must give a true and fair account of the income, expenditure, assets and liabilities of the association;
- a copy of the auditor's report to the association in relation to the accounts for that financial year; and
- a report, signed by two committee members, stating the name of each member of the committee, the principal activities of the association and the net profit or loss of the association.
• The committee must ensure that the audit of accounts is completed at least 14 days prior to the Annual General Meeting
• The accounts must be audited by a person who is not an officer or in any other way associated to an officer of the association and who has not prepared or assisted with the preparation of the accounts.

f. Further requirements
• When an association has been incorporated, the name of the association must be shown in full including the word "Incorporated" or "Inc." on all association documents.
• An incorporated association must have a common seal.
• An incorporated association must have a registered address (a PO Box is not acceptable).

How do we apply to incorporate?
Environment Groups (i.e. Associations) intending to incorporate should obtain an application for incorporation form either directly from the Registrar-General’s Office (RGO) or online through the Registrar-Generals website (see below). The application should be lodged with the prescribed fee, a copy of the association’s rules and a completed constitution reference checklist (available on-line or from the RGO).

Fees and charges
A fee applies to each document lodged with the Registrar-General’s Office. Fees are reviewed annually. Any group intending to incorporate should refer to the Registrar-General’s website or contact the RGO directly about current charges.

Contacts and links
Registrar-General’s Office (ACT)
Allara House
48-56 Allara Street,
Civic, Canberra, ACT
Telephone: (02) 620 70450 [Registrar-General]
(02) 620 70473 [Business Names & Associations Manager]

Website address: www.rgo.act.gov.au
Forms are available on-line at www.rgo.act.gov.au/sect3b2.htm
For details of fees, see www.rgo.act.gov.au/sect1b.htm#Associations

For legal advice on incorporation contact:
The Principal Solicitor
Environmental Defender’s Office ACT Inc.
GPO Box 574
Canberra ACT 2601
(02) 6247 9420
www.edo.org.au/edoact

Other Resources:
View or download the Associations Incorporation Act 1991 :

The Registrar-General’s office has prepared an Association Kit available online.

Disclaimer
The ACT EDO Fact Sheets aim to give readers plain English background knowledge to planning and environmental decision making in the ACT. The law described in this Fact Sheet is current at March 2005.

The information contained in this publication is for general reference only. If you are contemplating legal action, you should seek legal advice on the specific facts of your case as soon as possible. These Fact Sheets cannot replace the need for professional legal advice in individual cases.

Duplication and reproduction of the information provided in any ACT EDO Fact Sheet is permitted with acknowledgment of the ACT EDO as source.

The ACT EDO Fact Sheets Project was carried out with the assistance of funds made available by the ACT Government under the ACT Environment Grants Program.

Other Fact Sheet Titles

Note: The other fact sheet titles are unavailable at this time as they are being updated following legislative amendments and administrative changes. These fact sheets will be added as soon as possible.

Fact Sheet 1 Environmental and Planning Law in the ACT

Fact Sheet 2 National Capital Plan and the Territory Plan

Fact Sheet 3 The Development Approval Process

Fact Sheet 4 EIA Law in the ACT

Fact Sheet 5 Management of Public Lands

Fact Sheet 6 Heritage Law

Fact Sheet 7 Biodiversity Protection Law in the ACT

Fact Sheet 8 Tree Protection

Fact Sheet 9 Reviewing Environmental Decisions

Fact Sheet 10 Pollution Control Law in the ACT

Fact Sheet 11 Noise Pollution Control in the ACT

Fact Sheet 12 Freedom of Information Law in the ACT

Fact Sheet 13 Freedom of Information Law (Commonwealth)

For information about State environmental legislation, visit the national EDO website.

Important: These fact sheets provide a summary of the law and are not intended to be comprehensive or to cover the specifics of any given situation. While every effort has been made to ensure the content is as accurate as possible, the EDO does not accept any responsibility for any loss or disadvantage resulting from reliance or use of this work. Readers are advised to seek professional legal advice in relation to specific legal questions.