There are a number of ways an association can be closed.
An incorporated association can apply to voluntarily cancel its registration.
This process is most appropriate for small associations that:
- have a simple financial structure
- do not have significant assets
- have no outstanding contractual obligations
- have no outstanding liabilities
- are not subject to current or likely legal action.
Go to the Voluntary cancellation page for more information.
An association’s registration may be cancelled by NSW Fair Trading if:
- the association is not in operation
- the association has fewer than 5 members
- the association has failed to establish and maintain a committee
- the committee does not include 3 or more members, each of whom is over the age of 18 years
- the committee does not have at least 3 members residing in Australia
- the committee has not appointed a public officer who is over the age of 18 years and is a resident in NSW
- the association has been providing a financial gain for its members
- the association has not held an annual general meeting for 3 years
- the association has not lodged an annual summary of financial affairs for 3 years
- the association has failed to comply with a direction to change its name
- the association was registered because of fraud or mistake, or
- it is in the public interest to do so.
Where this cancellation action occurs, the association’s property comes under the control of Fair Trading. Fair Trading will determine what is to be done concerning payment of the association’s surplus and distribution of any property and the winding up of the association’s affairs.
An association ceases to be an independent legal entity when its registration is cancelled. Fair Trading may reinstate an association’s registration if satisfied that the registration should not have been cancelled. If an association’s registration is reinstated, the association is taken to have continued in existence as if it had never been cancelled.
Voluntary winding up
Where an association has:
- a complex financial structure
- significant assets
- outstanding liabilities or provisions, including if it has insufficient assets to meet its debts
- outstanding contractual obligations, including to employees
- current or likely legal actions.
it should obtain professional advice on the most appropriate manner to finalise its affairs. This may involve appointing a liquidator, by special resolution, to wind up the affairs of the association.
This process is undertaken under applied provisions of the Corporations Act 2001 (C’wealth).
The process involves:
- passing a special resolution to approve the association being wound up
- appointing a liquidator to manage the process of realising the association’s assets and the orderly winding up of the association’s affairs
- payment of its debts (if any), and
- distribution of any surplus assets. An association cannot distribute surplus assets to its members, except in the limited circumstances specified in section 65(3) of the Associations Incorporation Act 2009.
Transfer of incorporation
An association may apply for a transfer of registration to a different corporate structure. Go to the Transfer of incorporation page for information on transferring incorporation.