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cooperatives_and_associations
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/Factsheet_print/Cooperatives_and_associations/_About_associations.pdf
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Standard fact sheet.
/Factsheet_largeprint/Cooperatives_and_associations/_About_associations.pdf
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Large print fact sheet.

About associations 

An incorporated association has its own legal identity separate from its members, providing protection to members in legal transactions.

An incorporated association can:

  • enter into and enforce contracts, including the ability to hold, acquire and deal with property
  • sue or be sued
  • continue regardless of changes to membership.

While there are benefits to be gained from incorporation, there are also obligations. For example, incorporation requires the payment of application fees and requires the association to maintain proper financial and membership records and registers.

Incorporation is not compulsory and you may wish to seek advice from a solicitor, accountant, governing or funding body on whether incorporation is appropriate.

NSW Fair Trading’s Registry Services regulates incorporated associations registered under the Associations Incorporation Act 2009.

What is the objective of the Act? 

A key objective of the Act is to establish a scheme for the registration of associations that have been set up for small-scale, non-profit and non-commercial activities.

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What is the association's liability? 

As a legal entity in its own right, an association bears liability for its acts. This means that claims made against an association, either as debts or compensation for negligence, are the responsibility of the association.

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What liability do members have? 

Members are liable for the amounts each member owes the association in respect of their membership. For most this means the fees or subscriptions due to the association.

Members of the management committee of an association also have limited liability for the debts of an association, as long as they follow accepted business and community standards.

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Is there a limit to the number of members? 

The Associations Incorporation Act 2009 requires an association to have a minimum of five members at all times.

There is no maximum limit for the number of members.

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Can an association be refused incorporation? 

The Director-General may refuse an application to register an association and may direct an association to apply for cancellation. The Director-General will consider, taking into account the objects of the Act, whether an association should not be registered:

  • because some provision of the association’s constitution is contrary to law, or
  • where the nature or extent of the association’s activities exceeds Fair Trading's policy of $2 million or more in income, assets or expenditure, or
  • because of the nature or extent of the association’s dealings with the public, or
  • for any other reason that appears sufficient to the Director-General.

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Must all operations be in NSW? 

There is no requirement to have all operations in NSW. However if all, or a majority, of the association’s operations are outside NSW incorporation may not be appropriate.

The Act requires that the public officer reside in NSW.

If an association wishes to open an office or carry on some of its activities outside of NSW, it should obtain advice from the Australian Securities and Investments Commission (ASIC) or its own legal adviser about registering as a Registrable Australian Body under the Corporations Act 2001.

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Need more information? 

Contact Registry Services
Tel: 6333 1400
FreeCall: 1800 502 042

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