Incorporation is the legal process of forming a new corporation separate from the individual members. An incorporated association is considered at law to have a distinct identity that continues regardless of changes to the membership. Playgroups can incorporate under the Associations Incorporation Act 2015. The Act provides a low-cost, simple way of establishing a legal entity that has the capacity to function in its own right.
The decision to become incorporated is one that needs to be discussed widely within the playgroup. There are some costs involved and specific processes that need to be followed.
Why become incorporated
Becoming an incorporated association allows playgroups to enter into contracts, sign leases and employ staff as a separate entity, rather than under the name of individual members.
Additionally, an incorporated association will continue to exist and be recognised in law even when the members change, until the organisation is deregistered or wound up.
You may consider incorporation if your playgroup:
- Has several playgroup sessions run by a committee. Incorporation provides greater legal protection for group members, particularly for those most involved e.g. the committee or group leaders
- Leases or owns premises
- Wishes to apply for grants of more than $5000 (some local governments will only give grants to playgroups that are incorporated)
- Enters contracts
- Employs staff
- Needs to be incorporated as a requirement for using a venue
Responsibilities of Incorporated Groups
Incorporated groups have certain obligations under the Associations Incorporation Act 2015. When a playgroup is thinking about incorporation, they should consider carefully whether they have the capacity to meet the costs and responsibilities of an incorporated association.
Incorporated groups must:
- Have a constitution (written set of rules)
- Pay an initial registration fee
- Have a minimum of 6 members
- Have formal committee meetings and positions such as President, Secretary, Treasurer etc.
- Hold an Annual General Meeting
- Maintain a formal register of members
- Lodge an annual Information Statement with the Department of Mines, Industry Regulation and Safety
Constitution and rules
Incorporated groups are required to have a constitution. A constitution is a set of written rules by which the association (your playgroup) is governed, and must include the “objects” of the association (statement of the group’s purpose) The playgroup committee follows the principles in the rules to operate the playgroup.
Having a set of written rules means that all members know how the playgroup should operate. It sets out procedures to be followed and helps make decision making easier.
If a playgroup does not want to create their own rules, the Model Rules (available from the Department of Mines, Industry Regulation and Safety) can be adopted or used as a guide for developing your own constitution.
Monitor your constitution to keep it relevant.
The procedure for making changes is set down in your constitution. Changes must be lodged as prescribed in the Associations Incorporation Act 2015 and the appropriate fee paid.
Annual General Meetings
An Annual General Meeting (AGM) is:
- A public meeting where the playgroup committee is accountable for playgroup management for the previous year
- A condition of incorporation
- Held according to rules set down in the playgroup’s constitution
- Ideally held at the same time each year
The playgroup’s constitution usually identifies specific requirements regarding notice of the meeting. It’s a good idea to give plenty of notice of the AGM to make sure that everyone in the playgroup knows about it and has the opportunity to attend.
The following issues are usually dealt with at the AGM:
- Report from the President on activities during the past year
- Treasurer’s report on the financial position of the playgroup and/or presentation of the audited financial report (if required)
- Election of committee members (playgroups that are incorporated should check their constitution for rules on committee membership and appointment)
- Appointment of an auditor (if required)
- General business - usually only urgent matters that cannot wait until the next meeting.
Nominating for committee positions
The playgroup’s constitution will outline specific requirements about the nomination and election process. Usually nominations are called for at the AGM, however many groups advertise the positions and call for nominations prior to the AGM. Members can nominate themselves or be nominated by another member.
Nominations usually require someone to “second” them (that is to support the nomination).
If there is only one nomination for a position, the person is elected unopposed. In the event that there is more than one nomination for a position, a vote or ballot may be necessary.
Following the AGM, provide the playgroup members with information about the new committee members and their respective roles.
Please note: Each incorporated body will have different rules around committee membership and nominations. It is always best to check the constitution before the AGM.
Encouraging members to attend the AGM
People are often reluctant to attend the AGM but it is important that as many members as possible attend. Encourage members to attend the AGM. The following suggestion may be useful:
- Combine the AGM with the enrolment night
- Invite a guest speaker
- Arrange a créche facility
- Make the AGM a social event - include supper or drinks and nibbles
- Have a door prize
- Approach members in person prior to the AGM
- Ensure that members know they can attend even if they are unable to take on a committee role.
Work Health and Safety and Incorporation
The Associations Incorporation Act 2015 details the responsibilities groups need to follow in relation to employment of staff, contracting services and volunteers.
The Department of Mines, Industry Regulation and Safety is available for further information and assistance on 1300 30 40 54 or visit their website here.