Associations Incorporation Regulation 2022

Tier 1 and Tier 2 associations. The Regulation operationalises the two-tier financial reporting system established by the Act. A Tier 1 association is one whose gross receipts for the financial year are $500,000 or less and whose current assets at the end of the previous financial year are $1,000,000 or less (s 12(3)). Gross receipts are defined as total revenue recorded in the income and expenditure statement (s 12(1)). Current assets exclude real property and depreciable assets but include financial institution deposits, stocks and debentures (s 12(4)). An association that exceeds either threshold is a Tier 2 association and must prepare financial statements under s 47 of the Act and lodge a summary under s 49. The thresholds are regulatory policy choices; the Act itself does not define them.

Postal, electronic and combined ballots. The Regulation provides a comprehensive code for postal, electronic and combined ballots in Schedule 2. This code applies to any ballot conducted under ss 38(2) and 39(3) of the Act. Key concepts include an independent returning officer (no committee member may serve, Sch 2 cl 2), a voting roll prepared from the register of members (cl 3), minimum notice periods (14 days ordinary, 21 days for special resolution - cll 4, 5, 5A), secret ballot requirements, informal vote rules (a ballot paper is informal if the member did not follow instructions, but postal ballots are not informal merely because of unnecessary marks if the intention is clear - cl 6(2)), and secure storage of records for at least eight weeks after closing (cl 8). The committee determines the method (email, website, other electronic means) under cl 5(2). Combined ballots allow members to choose between postal and electronic voting (cl 5A(4)). The returning officer ascerts the result by counting postal votes and reviewing electronic reports (cl 7(1)(c)).

ACNC exemptions. A significant development inserted by the 2026 Amendment (No 19 of 2026) is the exemption from financial reporting requirements under the Act for both Tier 1 and Tier 2 associations that are registered entities under the Australian Charities and Not-for-profits Commission Act 2012 (Cth). The exemption requires that the association does not report as part of a reporting group under Subdivision 60-G of the Commonwealth Act, gives all required statements and reports under Division 60, and that information is publicly available on the ACNC Register (ss 13A, 14A). This aligns State reporting with Commonwealth charity reporting, reducing duplication. The exemption is not automatic - the association must satisfy all three conditions. It applies only to financial years ending after the commencement of the sections (s 21B).

Unacceptable names. Schedule 1 declares fourteen categories of names unacceptable for registration. The list goes beyond mere similarity to existing names. It includes any name identical or closely resembling a business name registered under the Business Names Registration Act 2011 (Cth), unless the public is not likely to be misled or the applicant has registered the name (cl 1); names of building societies, co-operatives, credit unions (cl 2); names reserved or registered under the Corporations Act (cl 3); names of criminal organisations under the Crimes (Criminal Organisations Control) Act 2012 (cl 4); names suggesting connection with any Australian or foreign government (cl 5), a government agency or public authority (cl 7), a local council (cl 8), the royal family without actual connection (cl 9), an ex-service organisation without connection (cl 10), or a person alive or dead without connection (cl 11); names suggesting royal patronage without basis (cl 12); names containing any of a list of words including “co-operative”, “credit union”, “GST”, “Oxfam”, “stock exchange” (cl 13); and any name likely to mislead the public about the association’s nature, objects or functions (cl 14). This schedule is jurisdiction-specific: it incorporates other NSW legislation (criminal organisations), Commonwealth registers, and general reputational protections.

Model constitution. Schedule 3 contains the prescribed model constitution. Associations may adopt it in whole or in part, or use a different constitution, provided it meets the Act’s requirements. The model covers membership (application, register, fees of $1 entrance and $2 annual subscription, but the committee may vary these - cl 5), disciplinary action with a right of appeal to a general meeting (cll 7-8), internal dispute resolution through a Community Justice Centre and then arbitration (cl 9), a committee of seven members (president, vice-president, secretary, treasurer and three ordinary members - cl 14), election procedures, quorum of three (cl 23), general meetings (annual and special), quorum of five (cl 31), postal/electronic ballots (cl 35), financial year ending 30 June (cl 44), non-distribution of profits to members (cl 40), winding up distribution to similar non-profit organisations (cl 45), and various administrative provisions. The model is a default; associations can customise, but any change requires registration under s 10 of the Act.

Fee units and indexing. Fees are expressed in fee units. For 2022-23, one fee unit equals $111.14. In subsequent years, the fee unit is calculated by the formula A/B × $111.14, where A is the March quarter CPI number for the preceding financial year and B is the March quarter CPI for 2017 (Sch 4, Pt 2, cl 2). The result is rounded to the nearest cent (0.5 cent down). The fee unit cannot decrease - if the calculated amount is less than the previous year’s, the previous year’s figure applies (cl 2(3)). After calculating the fee unit, the actual fee is rounded to the nearest dollar (50 cents down) (cl 3). The Secretary must notify the Parliamentary Counsel and give public notice of indexed fees, but indexing operates automatically (cl 4). The schedule includes an editorial note showing actual fee unit amounts for 2023-24 ($119.23), 2024-25 ($123.72), and 2025-26 ($126.59).

Applied Corporations legislation. Section 5 declares that matters relating to an association are applied Corporations legislation matters for the purposes of Part 3 of the Corporations (Ancillary Provisions) Act 2001 (NSW), in relation to Corporations Act s 1322(1)-(3A) and (4)-(6). This means the procedural irregularity provisions of the Corporations Act apply to associations with specific modifications: “this Act” includes the Associations Incorporation Act, “corporation” includes association, and references to meetings include postal, electronic or combined ballots. This allows courts to remedy procedural irregularities in association meetings and decisions, consistent with corporate law principles.

The Regulation directly affects every incorporated association in New South Wales that is registered under the Associations Incorporation Act 2009. Currently there are tens of thousands of such bodies - from small community groups and sporting clubs to larger charities and professional societies. The Regulation also affects persons who are involved in forming, managing or advising these associations.

Associations themselves are the primary subjects. All associations must determine their Tier status each financial year by applying the thresholds in s 12. This determines whether they must prepare Tier 1 financial statements under ss 43-45 or Tier 2 financial statements and summaries under ss 47-49. Associations that are also ACNC-registered charities may fall within the exemptions in ss 13A and 14A, which relieve them of State reporting obligations if they lodge equivalent information with the Commonwealth. Associations that conduct postal, electronic or combined ballots must follow the strict procedures in Schedule 2. Those that adopt the model constitution in Schedule 3 will have default rules, but any amendments must be registered.

Committee members are directly affected by s 10, which requires the register to record their office-holder status and dates. The model constitution imposes duties on the secretary (keeping minutes, cl 18), treasurer (collecting money, keeping accounts, cl 19), and all committee members (control and management, cl 13). They are subject to the eligibility requirements in the Act and the procedures for meetings and voting in the model constitution.

Members of associations have rights to inspect the register of members (model constitution cl 4(2)(d)), committee disclosures (fee of 0.05 fee units - Sch 4 item 6), financial documents, and certain records. They may call special general meetings if at least 5% of members request it (model cl 29). They are liable only for unpaid fees (model cl 6). They are subject to disciplinary action under the model constitution with a right of appeal to a general meeting.

Applicants for incorporation or registration of changes must comply with the additional document requirements in s 6 (for registrable corporations or amalgamations) and pay the prescribed fees in Schedule 4. Applicants for transfer of registration under s 78 must provide the declarations and overdue documents listed in s 9.

Returning officers appointed to conduct ballots cannot be committee members (Sch 2 cl 2). They have duties to prepare voting rolls, distribute materials, count votes, and secure records for at least eight weeks. They may appoint assistants.

The Secretary of the Department of Customer Service (or delegate) has powers under the Regulation: to exempt Tier 1 associations from Australian Accounting Standards (s 13(2)), to waive or reduce fees in financial hardship or special circumstances (s 20), to approve certificates of authority (s 16), to issue replacement certificates (Sch 4 item 2), to grant extensions of time for AGMs and lodgments (Sch 4 items 7, 9, 12), and to direct how special resolutions may be passed (Sch 4 item 8). The Secretary also has information-sharing powers with the ACNC under s 17.

The Australian Charities and Not-for-profits Commission is prescribed as a relevant agency for information exchange (s 17). The exemptions in ss 13A and 14A rely on the ACNC Register being publicly available and the association being individually registered.

Auditors and reviewers are affected by s 52 of the Act, which requires audits or reviews for Tier 2 associations. The Regulation provides a fee of 1.90 fee units for an application to approve a person not otherwise qualified to carry out an audit (Sch 4 item 15).

Third parties dealing with associations - such as creditors, donors, and members of the public - are affected by the name restrictions (Schedule 1) which aim to prevent misleading names, and by the requirement that financial documents be publicly accessible. The penalty notice regime (Schedule 5) provides a quick enforcement mechanism for breaches of the Act, which can affect compliance officers and the community generally.

Duty to keep adequate records and minutes. Under s 15 of the Regulation, an association must keep records and minutes required under s 50 of the Act in written or electronic form, and must keep each record for at least five years after the day it is made. Electronic records must be convertible to hard copy. If a person entitled to inspect asks for a hard copy, the association must provide it within a reasonable time. This duty covers all records of receipts, expenditure, assets, liabilities, and minutes of committee and general meetings.

Duty to adopt proper ballot procedures. Section 11 mandates that postal, electronic or combined ballots must be conducted in accordance with Schedule 2. The committee must prepare a statement of the matter, appoint a returning officer (who cannot be a committee member), fix a closing date, and ensure the ballot is conducted by that returning officer (Sch 2 cl 1). The returning officer must prepare a voting roll from the register of members (cl 3). Notice periods are 14 days for ordinary resolutions and 21 days for special resolutions (cll 4(2), 5(3), 5A(2)). For postal ballots, the return envelope must contain the member’s name and address on the reverse, and a “Ballot Paper” envelope for secret ballots. The returning officer must compare details with the roll upon receipt and secure the ballot paper. For electronic ballots, the returning officer must give members access to an electronic ballot paper with instructions, and for secret ballots must ensure the member’s identity cannot be ascertained from the ballot paper. Combined ballots allow members to choose their method (cl 5A(4)). Informal ballot papers are those where the member failed to follow instructions, but postal ballots with unnecessary marks are not informal if the intention is clear (cl 6). The returning officer must prepare a signed statement of results and give a copy to the secretary, who must minute the result and, for special resolutions, give written notice to members promptly (cl 7(3)). Ballot records must be kept secure for at least eight weeks (cl 8).

Right to inspect records. Members have a right to inspect the register of members free of charge at a reasonable time (model constitution cl 4(2)(d)), and may obtain hard copies for a fee of not more than $1 per page (cl 4(4)). Information other than a member’s name must not be made available for inspection if the member requests otherwise (cl 4(5)). Members may also inspect the constitution, minutes, and other records under cl 43, though the committee may refuse access to documents relating to confidential, personal, commercial, employment or legal matters, or if inspection would be prejudicial to the association’s interests. The Regulation sets a maximum fee of 0.05 fee units for inspecting the book containing disclosures of interests by committee members (Sch 4 item 6).

Duty to lodge financial documents on time. Tier 1 associations must lodge financial documents (statements, auditor’s or reviewer’s reports, and committee reports) under s 45 of the Act. Tier 2 associations must lodge a summary under s 49. The Regulation provides for late payment penalties: for Tier 1, 0.92 fee units if less than one month late, 1.17 fee units if more than one month late (Sch 4 items 11(a),(b)). For Tier 2, 0.27 fee units if less than one month late, 0.35 fee units if more than one month late (Sch 4 items 14(a),(b)). Applications for extensions cost 0.32 fee units (Sch 4 items 9, 12).

Right to apply for exemptions. Associations that are ACNC-registered entities and meet the conditions in ss 13A (Tier 1) or 14A (Tier 2) are exempt from financial reporting requirements under the Act. The exemption is not automatic - it requires that the association does not report as part of a group, gives all required statements to the ACNC, and the information is publicly available on the ACNC Register. Associations that are not ACNC-registered may apply for individual exemptions under s 53 of the Act, with a fee of 1.90 fee units (Sch 4 item 16). The Secretary may also exempt Tier 1 associations from Australian Accounting Standards under s 13(2).

Right to have fees waived. Section 20 allows the Secretary to waive, reduce, postpone or refund a fee in whole or in part if the person is suffering financial hardship or special circumstances exist, such as recovery from a natural disaster. This gives the Secretary a broad discretion to assist financially distressed associations.

Duty to maintain a register of committee members with prescribed particulars. Under s 10, the register must include whether the member holds a specific office (president, vice-president, secretary, treasurer) and the dates of election/appointment and cessation. This goes beyond the Act’s requirement to keep a register and ensures transparent recording of office-holding.

Duty to ensure certificates of authority are properly issued. Inspectors appointed under s 88 of the Act must carry a certificate in the form approved by the Secretary that meets all the requirements of s 16, including stating the powers do not extend to residential premises without occupier consent.

The Regulation does not create new offences - those are in the Act. However, Schedule 5 designates which offences are penalty notice offences and sets the amounts payable. The penalty notice regime under s 93 of the Act allows an authorised officer to issue an infringement notice for these offences, avoiding the need for a court prosecution.

The penalty notice amounts are modest, ranging from $50 to $200. The lower end ($50) covers offences such as failing to keep a register of members (s 29(1)), failing to notify changes to the register (s 34(1) and (6)), failing to keep custody of records (s 35(3)), failing to hold AGMs on time (s 37(1) and (2)), failing to keep proper financial records (s 41(1)), obstructing an inspector (s 90(1)), and failing to comply with a direction about document service (s 101(2)). The higher end ($200) covers offences related to financial reporting: failing to prepare financial statements (s 43(1)), failing to have them audited or reviewed (ss 44, 48), failing to lodge documents on time (ss 45(1), 49(1)), failing to keep records (s 50(1)), and failing to provide documents to the Secretary (s 51(3)). Also, s 13(1) of the Act (carrying on activities before registration) attracts a $200 penalty.

The penalty amounts are fixed in dollar terms in Schedule 5 and are not indexed. This means they remain constant unless the Regulation is amended.

Certificates of authority. Enforcement officers (inspectors) derive their powers from s 88 of the Act. The Regulation prescribes the form and content of the certificate they must carry (s 16). The certificate must state that the powers do not extend to residential parts of premises except with the occupier’s consent. This is a significant limitation on inspection powers - officers cannot enter residential areas without permission.

Applied Corporations Act provisions. Section 5 declares that Corporations Act s 1322 (which deals with procedural irregularities) applies to associations with modifications. This means that a court may make orders to validate meetings or decisions that would otherwise be invalid due to a procedural irregularity, provided the irregularity did not cause substantial injustice. The modifications ensure that postal, electronic or combined ballots are treated as meetings for the purposes of the section. This is important for enforcement because it gives associations and members a remedial mechanism if procedural mistakes occur.

Information exchange. The ACNC is prescribed as a relevant agency for information exchange under s 106A of the Act (s 17). This allows the Secretary and the ACNC to share information about associations, which can assist in enforcement where an association is also a charity.

Fees for late lodgment. While not strictly penalties, the late payment fees in Schedule 4 operate as a financial deterrent. For Tier 1 associations, the late fee for lodging financial documents is 0.92 fee units if less than one month late (approximately $105 for 2023-24) and 1.17 fee units if more than one month late (approximately $140). For Tier 2, the late fees are 0.27 fee units (approx $32) and 0.35 fee units (approx $40). These are in addition to the lodgment fee itself. The additional fee for late payment of a prescribed fee not otherwise specified is 0.27 fee units (Sch 4 item 28).

The combination of penalty notices, late fees, and the ability to seek court orders under s 1322 provides a layered enforcement framework. The NSW Fair Trading Department (the Secretary) is the primary enforcer, with powers to issue penalty notices, grant extensions, and inspect premises. The penalty notice amounts are designed to be low enough to encourage payment rather than contest, but high enough to deter non-compliance.

Associations Incorporation Act 2009 (NSW). The Regulation is made under this Act and sits directly beneath it. Almost every section of the Regulation refers to a specific section of the Act for which it prescribes matters. For example, s 12 prescribes the amounts for s 42(1) of the Act (Tier 1 thresholds), s 11 prescribes ballot procedures for ss 38(2) and 39(3), and s 18 prescribes the model constitution for s 107(1)(a). The Regulation cannot exceed the scope of the Act; it is confined to prescribing matters that the Act expressly permits to be prescribed.

Australian Charities and Not-for-profits Commission Act 2012 (Cth). This Commonwealth Act is heavily engaged. The ACNC is defined in s 3 as the body that maintains the ACNC Register. Section 17 prescribes the ACNC as a relevant agency for information exchange under s 106A of the Act. Most significantly, ss 13A and 14A provide exemptions from State financial reporting for Tier 1 and Tier 2 associations that are ACNC-registered entities and meet the conditions of reporting individually under Division 60 of the Commonwealth Act. This creates a one-stop-shop for charity reporting: an association that complies with Commonwealth reporting obligations need not duplicate reports to NSW. However, the exemption is conditional on the information being publicly available on the ACNC Register. Associations that are not registered charities, or that report as part of a group, still must comply with the State regime.

Corporations Act 2001 (Cth) and Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth). The Regulation declares the CATSI Act a corresponding law (s 4), meaning it is treated similarly to the Associations Incorporation Act for certain purposes. Section 5 applies Corporations Act s 1322 (procedural irregularities) to associations with modifications. This means that the well-known corporate law principles for validating defective meetings and documents extend to associations. The modifications ensure that references to “meeting” include postal, electronic or combined ballots, and that references to “register kept by ASIC” include registers kept under the Act. This interaction is important because it gives associations access to the same remedial provisions that corporations have.

Corporations (Ancillary Provisions) Act 2001 (NSW). This State Act enables the application of Commonwealth Corporations Act provisions to State bodies. Section 5 of the Regulation uses Part 3 of that Act to apply s 1322 of the Corporations Act.

Business Names Registration Act 2011 (Cth). Schedule 1, clause 1 declares a name unacceptable if it is identical or closely resembles a registered business name, unless the public is not likely to be misled or the applicant has registered that name. This prevents associations from adopting names that could cause confusion with registered business names.

Interpretation Act 1987 (NSW). The Regulation notes in s 3 that the Interpretation Act contains definitions and other provisions affecting interpretation. The model constitution also states that the Interpretation Act applies as if the constitution were an instrument under the Act (Sch 3, cl 1(2)). This imports standard rules about giving notice, service of documents, and ancillary powers.

Crimes (Criminal Organisations Control) Act 2012 (NSW). Schedule 1, clause 4 prohibits names identical or closely resembling the name of a criminal organisation or declared organisation under that Act. This prevents associations from associating with or mimicking criminal organisations.

Community Justice Centres Act 1983 (NSW) and Commercial Arbitration Act 2010 (NSW). The model constitution requires internal disputes to be referred to a Community Justice Centre for mediation, and if unresolved within three months, to arbitration under the Commercial Arbitration Act (Sch 3, cl 9). This integrates specialist dispute resolution mechanisms into the governance of associations.

Subordinate Legislation Act 1989 (NSW). The Regulation notes that the 2016 Regulation was repealed on 1 September 2022 by s 10(2) of that Act. The Regulation itself is subject to Parliamentary scrutiny and automatic repeal provisions.

Other State and Territory laws. The name restrictions in Schedule 1, cll 5, 7 and 8 prevent associations from suggesting connections with the government of any State or Territory, or local council, without actual authorisation. This interacts with each jurisdiction’s laws on the use of government names.

The Regulation, as originally made on 1 September 2022, has been amended three times.

2024 Amendment (No 25 of 2024, Sch 7.2). This amendment, which appears to be part of an omnibus statute law revision, made changes to s 5 (application of Corporations legislation) and s 11 (conduct of postal, electronic or combined ballots). The exact nature of the changes to s 5 is not detailed in the text, but the amendment note refers to Sch 7.2[1] (and later [2] and [3] for Sch 2). For s 11, the amendment expanded the reference to “postal, electronic or combined ballot” in Schedule 2 headings and text, reflecting the introduction of combined ballots. The amendment also updated Schedule 2 to insert the new s 5A on combined postal and electronic voting, and made consequential changes to ballot result provisions. This was a significant expansion of the ballot regime to explicitly cover hybrid voting methods.

2025 Amendment (No 296 of 2025, Sch 1[1][2][3]). The Associations Incorporation Amendment (Financial Reporting Thresholds) Regulation 2025 amended s 12(3) to increase the prescribed amounts: from $250,000 to $500,000 for gross receipts, and from $500,000 to $1,000,000 for current assets. These are the current thresholds. The amendment also inserted s 21A as a transitional provision, providing that the new thresholds do not apply to a financial year that ended before 1 July 2024. This means associations could continue using the old thresholds for the 2023-24 financial year. The amendment effectively doubled the thresholds, bringing more associations into Tier 1 and reducing the reporting burden.

2026 Amendment (No 19 of 2026, Sch 1[1]-[5]). The Associations Incorporation Amendment (Exemptions) Regulation 2026 made several changes. It amended s 3 to add the definition of “ACNC Register” and “Commonwealth Act”. It inserted new ss 13A and 14A, which exempt Tier 1 and Tier 2 associations from financial reporting requirements if they are ACNC-registered entities and meet the reporting conditions. It also amended s 17 to prescribe the ACNC as a relevant agency for information exchange, and inserted s 21B as a transitional provision ensuring those exemption sections only apply to financial years ending after their commencement. This amendment aligned State reporting with Commonwealth charity reporting and was a major policy shift.

The Regulation also includes editorial notes showing fee unit amounts for 2023-24 ($119.23), 2024-25 ($123.72), and 2025-26 ($126.59) under the automatic indexing mechanism.

The Regulation itself has not been the subject of reported litigation; as a subordinate instrument it would generally be challenged only on grounds of ultra vires or procedural error. However, its provisions interact with the Act and the Corporations Act in ways that may generate case law.

The application of Corporations Act s 1322 to associations via s 5 of the Regulation is notable. There is substantial case law under the Corporations Act on s 1322, covering validation of meetings where notice was defective, quorum irregularities, and invalid appointments. By applying this section, the Regulation invites courts to apply those corporate precedents to associations. For example, in Re Deck Resources Pty Ltd [2021] NSWSC 1234 (hypothetical), a court might apply similar reasoning to an association’s AGM that was held without proper notice. The modifications in s 5 specifically extend the concept of “meeting” to postal, electronic or combined ballots, so cases on corporate ballot irregularities could be directly relevant.

The name restrictions in Schedule 1 may be litigated if the Secretary refuses to register a name and the association challenges the decision on judicial review. For instance, clause 14 prohibits a name “likely to mislead the public”. This is an objective test that could be litigated in the NSW Civil and Administrative Tribunal (NCAT) or Supreme Court. There is case law under the Corporations Act on similar name prohibitions (e.g., Re Australian Dreamtime Pty Ltd [2007] FCA 1405) that might be persuasive.

The penalty notice regime (Schedule 5) may be challenged on grounds of natural justice or whether the offence provision in the Act is properly designated. However, penalty notices are infringement notices, not convictions, so they rarely generate reported litigation unless the recipient elects to have the matter heard in court.

The Secretary’s discretion to refuse an exemption from financial reporting may also be subject to judicial review. Under s 53(3) of the Act, the Secretary may exempt an association from financial reporting requirements. The Regulation adds the ACNC-based exemptions in ss 13A and 14A, but associations not covered may apply under s 53. If the Secretary refuses, the association could seek reasons and potentially challenge the decision.

The transitional provisions (ss 21, 21A, 21B) may be relevant in disputes about which version of the thresholds or exemptions applied in a given financial year. For example, the 2025 threshold increase applies only to financial years ending on or after 1 July 2024. An association that filed as Tier 1 for 2023-24 using the old thresholds would be protected by s 21A.

No specific cases are mentioned in the Regulation.

ACNC exemption is not automatic and has traps. The exemptions in ss 13A and 14A apply only if three cumulative conditions are met: (a) the association is an ACNC registered entity, (b) it does not report as part of a reporting group under Subdivision 60-G of the Commonwealth Act, and (c) it gives all statements and reports as required by Division 60 and the information is publicly available on the ACNC Register. Many small charities report as part of a group (e.g., a central charity with branches). Those branch charities would still need to lodge financial documents under the Act. Also, the exemption only applies to financial years ending after the commencement of ss 13A and 14A (s 21B). Associations that were ACNC-registered before that commencement must still comply for earlier years.

Thresholds changed mid-stream. The 2025 amendment raised the Tier 1 thresholds from $250,000 to $500,000 (gross receipts) and from $500,000 to $1,000,000 (current assets). However, the transitional provision (s 21A) says the amendment does not apply to a financial year that ended before 1 July 2024. So for the 2023-24 financial year, the old thresholds apply. An association with gross receipts of $400,000 for 2023-24 would have been Tier 1 under the old $250,000 threshold? Actually, $400,000 exceeds $250,000, so it would be Tier 2 under the old threshold but Tier 1 under the new threshold. Because the new threshold does not apply for 2023-24, the association must still prepare Tier 2 statements for that year. Associations must be careful to apply the correct thresholds for each year.

Ballot records must be kept for only 8 weeks. Schedule 2, cl 8 requires the returning officer to keep ballot records (voting rolls, ballot papers, electronic records) for at least 8 weeks after the closing date. After that, the committee may direct a longer period. But the general record-keeping requirement under s 15(1)(b) is 5 years. There is a potential conflict: if the association destroys ballot papers after 8 weeks, they may be in breach of the 5-year requirement for minutes and records under s 50(1) of the Act? However, s 15 applies to records required under s 50, which includes minutes of meetings. Ballot papers may not be minutes per se, but they are evidence of the ballot result which must be minuted. Best practice is to retain ballot records longer, but the Regulation explicitly allows shorter retention. This could catch an association that destroys records too quickly.

Combined ballots require both postal and electronic materials. Under s 5A of Schedule 2, when a combined ballot is held, the returning officer must give each member the items required for postal voting (s 4(2)) and the items for electronic voting (s 5(3)) at least 14 (or 21) days before closing. This means the association must provide a physical ballot paper and a physical return envelope with the member’s name on the reverse, as well as electronic access instructions. The member then chooses which method to use. If a member uses both, the returning officer must presumably count only one. The Regulation does not address double voting, so the committee should have a policy. Also, the returning officer must ensure the identity cannot be ascertained from the electronic ballot paper for secret ballots (s 5A(3)). This may be technically challenging for small associations using email voting.

Fee rounding rules can cause small associations to overpay. The fee unit is indexed annually, and the actual fee is calculated by multiplying the fee units by the fee unit amount, then rounding to the nearest dollar (50 cents down). For example, a fee of 0.27 fee units for late lodgment of a Tier 2 summary: in 2023-24, 0.27 × $119.23 = $32.19, rounded down to $32. In 2025-26, 0.27 × $126.59 = $34.18, rounded down to $34. The rounding can produce minor variations. But if an association miscalculates and underpays by a few cents, it may be treated as late payment and incur additional fees.

Model constitution default financial year is 30 June. Clause 44 of the model constitution sets the financial year as 1 July to 30 June. For associations incorporated under the old 1984 Act, s 21 provides a substitute clause that allows a financial year of 12 months or up to 18 months as resolved by the association. This substitute applies only to associations that had the old clause 4 of Schedule 4 of the Act applied to them and whose constitution does not address the financial year. Associations that adopted the model after 1 September 2022 get the 30 June default. If an association wants a different financial year (e.g., 1 July to 30 June is standard but some may want calendar year), it must amend its constitution and register the change.

Secretary’s wide discretion on fees. Section 20 allows the Secretary to waive, reduce, postpone or refund fees if satisfied it is appropriate because of financial hardship or special circumstances. “Special circumstances” is not defined, and the example given is natural disaster. Associations should not assume leniency - the Secretary has discretion. There is no right of review specified in the Regulation.

Penalty notices are not the only enforcement. Schedule 5 sets out penalty notice amounts, but the Secretary may also prosecute offences under the Act. The penalty notice is simply an alternative. The relatively low amounts (e.g., $50 for failing to keep a register) may lead to a culture of non-compliance, but associations should be aware that the Secretary could still seek court orders.

Determine your tier each year. At the end of each financial year, calculate the association’s gross receipts (total revenue in the income and expenditure statement) and current assets (assets held on the last day of the previous year, excluding real property and depreciable assets but including bank accounts, stocks, debentures). Compare against the thresholds: gross receipts $500,000 or less AND current assets $1,000,000 or less = Tier 1; otherwise Tier 2. Apply the correct thresholds for the year - for 2023-24 and earlier, use the old thresholds ($250,000/$500,000). For 2024-25 onward, use the new thresholds. If the association is ACNC-registered and meets the conditions in ss 13A or 14A, it may be exempt from the financial reporting requirements under the Act for that year. Otherwise, prepare the appropriate statements.

Adopt or tailor the model constitution. Schedule 3 provides a comprehensive model. Associations can adopt it in full by reference, or customise it. Any customisation must comply with the Act (e.g., cannot permit profit distribution to members - see s 40 of the Act). If the association uses a different constitution, ensure it addresses the financial year, quorum, voting, committee composition, and other mandatory matters. Register any changes under s 10 of the Act, paying the prescribed fee (0.50 fee units for changes to objects or constitution, 1.00 fee units for name change if not reserved).

Conduct ballots strictly in accordance with Schedule 2. If the association decides to hold a postal, electronic or combined ballot (for example, to pass a special resolution without a physical meeting), follow the procedures precisely. Appoint a returning officer who is not a committee member. Prepare a voting roll. Distribute materials at least 14 days (21 for special resolutions) before closing. For postal ballots, include a return envelope with the member’s name and address on the reverse. For secret ballots, use a “Ballot Paper” envelope. For electronic ballots, ensure the member’s identity cannot be ascertained from the ballot paper. For combined ballots, provide both sets of materials. Count votes promptly and minute the result. Keep ballot records secure for at least 8 weeks, but consider keeping them longer to comply with the general record-keeping obligation.

Maintain registers and records. Keep a register of members (with names and at least one address, date of membership, date of cessation). Keep a register of committee members that includes the specific office held (president, vice-president, secretary, treasurer) and the dates of election/appointment and cessation (s 10). Keep minutes of all committee meetings and general meetings. Keep financial records for at least 5 years (s 15). Ensure records can be converted to hard copy if electronic.

Lodge financial documents on time. Tier 1 associations must lodge financial statements, auditor/reviewer reports, and committee reports under s 45 within 1 month of the AGM (or as extended). Tier 2 associations must lodge a summary under s 49 within the same timeframe. Pay the prescribed fee with lodgment. If late, pay the additional late fee. If the association is exempt under ss 13A or 14A, no lodgment is needed, but retain evidence of ACNC compliance.

Choose a name carefully. Before applying for registration or a name change, check the name against Schedule 1. Do not use a name that resembles a registered business name, a company, a co-operative, a criminal organisation, or suggests a connection with government, royalty, or a specific person without authorisation. Avoid prohibited words like “co-operative”, “credit union”, “GST”, “Oxfam”, “stock exchange”. If the name is similar to an existing registered name, obtain consent or show the public will not be misled. Reserve the name first for 0.50 fee units.

Pay fees correctly. Look up the current fee unit amount on the NSW legislation website (the editorial note in Schedule 4 provides recent figures). Multiply the fee units in Schedule 4, Part 1 by the fee unit amount, then round to the nearest dollar (50 cents down). Pay the correct amount with the application. If the association is suffering financial hardship or has special circumstances, apply to the Secretary for a waiver or reduction under s 20.

Understand the ACNC exemption pathway. If the association is a registered charity with the ACNC and reports individually (not as part of a group), check whether all required statements and reports have been given and are publicly available. If so, the association is exempt from producing separate Tier 1 or Tier 2 financial documents under the Act for that year. However, the association must still comply with the ACNC’s requirements. If the association later ceases to be ACNC-registered, or reports as part of a group, the exemption no longer applies from the next financial year.

Seek advice for complex situations. Amalgamations, transfers of registration to another jurisdiction, and special resolutions requiring Secretary approval involve additional documents and fees. For example, an application for a direction about how a special resolution may be passed costs 0.85 fee units (Sch 4 item 8). The application for a transfer of registration declaration requires declarations about creditors and continuation of legal personality (s 9). Always check the latest version of the Regulation, as fee amounts change annually, and new amendments may introduce further exemptions or requirements.