Incorporated Associations (NT)

People establish groups for a variety of sporting, social and community purposes. When a not-for-profit member group wants to establish itself as a legal entity, it can incorporate as an association. Incorporating is a straightforward and inexpensive way to create a separate legal entity and limit member liability. This article explains the legal implications when establishing incorporated associations in the Northern Territory.

Benefits of incorporation

An incorporated association is able to act as a legal entity in its own name. This means that an incorporated association can borrow money, own property and enter into contracts. For instance, an incorporated sports club can enter into a commercial lease for club premises, and the individual members of the club are not legally or financially liable for the lease.

Eligibility for incorporation

A group incorporates according to the state or territory law. Under the Associations Act 2005, a group in the Northern Territory is eligible for incorporation if there are at least five voting members, funds are not distributed to the members, and it is formed for one of the following purposes:

• Religious, benevolent, charitable or educational reasons;
• Provision of medical consultation or treatment;
• Promotion of science, art, literature or cultural activity;
• Provision of amusement or recreation; or
• Beautification or improvement of a community centre.

It may be possible to obtain approval to form an association for another purpose by contacting Licensing NT and paying an additional fee.

Name of association

The name of an incorporated association must meet statutory requirements in the Northern Territory. An incorporated association is recognisable by the word ‘Incorporated’ or the abbreviation ‘Inc’ after the name. It must be recognisably different from other organisations and businesses listed on the Australian Securities and Investments Commission register. The name cannot use any names prohibited by the Associations Regulations 2004, although Licensing NT may approve the use of an unauthorised name.

Obligations of an Incorporated Association

Licensing NT maintains a public register of association names, and also holds copies of association constitutions, financial statements and names and contact details of public officers. An incorporated association must have at least one “public officer” (and may also decide to appoint a president/chairperson, treasurer and secretary). The public officer is the association’s legal representative and point of contact for the public and Licensing NT. The public officer must be either an employee or member of the association, over the age of 18, and a resident of the Northern Territory. A public officer is ineligible for office if they die, become bankrupt, lose legal capacity or move away from the Northern Territory. When the association first incorporates, the applicant is automatically appointed as public officer. A public officer can be removed either through formal resignation or member vote. A form must be lodged with Licencing NT to officially appoint someone else in the position.

Management committee

The association’s management committee is composed of the public officer and ordinary members, some of whom may fill roles such as president or treasurer. The committee appoints the public officer and makes sure that the position is never vacant for more than 14 days. The management committee has a duty to act in the best interest of the association and disclose conflicts of interest on any association contracts and table them at the AGM. The committee keeps and makes available an up-to-date register of members, a register of association assets, and a list of reported conflicts. Meetings of the Management Committee should be held according to the rules set out in the association’s constitution. Minutes must be recorded, confirmed by members and signed by the meeting chair. The management committee is responsible for lodging audited annual accounts in the prescribed timeframe to Licensing NT and providing copies to members at least 14 days before the association’s annual general meeting.

Constitution

The public officer must submit a copy of the association’s draft constitution with the application to register the association. The constitution is drafted with the approval of all members, setting out the particular activity or objective that is the purpose of the association. A constitution also establishes a framework for how the members should manage and operate the association. To be legally valid, the association’s constitution must include all of the following information:

• Membership and office bearer requirements;
• Management committee powers and structure;
• Process to fill office bearer positions;
• Process for calling and holding management committee meetings;
• Dispute settlement process for members;
• Process for funds management;
• Process for amending the constitution, objectives, or the association; and an
• Annexure clause.

When forming an incorporated trading association, the constitution must also indicate how members share profits and how surplus assets are divided when the association dissolves.

Go To Court Lawyers can answer any questions you have about incorporated associations. Please contact the Go To Court team on 1300 636 846 for further information.