A Club’s Constitution

A Club’s Constitution

By Bruce Gotterson

June 24, 2018

This article appeared in the June 2018 issue of Club Life.

I have written previously about the importance of boards and management regularly reviewing their club’s constitution, to ensure that it is up to date with current legal requirements, and also to ensure that it reflects good corporate practice.

As many clubs hold their Annual General Meetings later this year it is timely to again raise this issue.

The laws that relate to, and impact upon, registered clubs have changed significantly in the last 10 to 15 years. Examples of this include:

  • the corporate governance amendments to the Registered Clubs Act in 2004;
  • the commencement of the Liquor Act in 2008;
  • amendments to the annual reporting requirements contained in the Corporations Act in 2010;
  • amendments to the Registered Clubs Act relating to the removal of persons from the premises of a Club, reporting requirements and the disposal of land;
  • amendments to the Registered Clubs Act relating to director training, board appointed directors and “capping” the number of directors on club boards to nine,
  • removal from the Corporations Act of the right in 100 members to request for a general meeting to be called, and
  • amendments to the Registered Clubs Act arising from the Registered Clubs Amendment (Accountability and Amalgamations) Act.

Each legislative change introduced substantial reforms to the administration of registered clubs in NSW.

The task of reviewing and understanding constitutions can often prove to be a daunting one. However the task of review is necessary for a number of reasons.

Firstly, it is to identify whether the constitution is inconsistent with any provision of the Registered Clubs Act or any other legislation.  Disciplinary action can be taken against a Club under section 57F of the Registered Clubs Act if it can be established that the Club has habitually broken a deemed rule under section 30 (1) or a rule of the club.  So if a club has a rule in its constitution for example which allows proxy voting at general meetings, which is inconsistent with one of the rules in section 30 (1) which prohibits voting by proxy, then the club may face disciplinary action if the rule has been broken many times over a number of years.

Secondly, it is to identify whether the constitution correctly reflects the provisions of relevant legislation.

Thirdly, it is to identify whether the document needs to be formatted so that it is set out in a more coherent and logical manner.

Fourthly, it is to identify where change is required to include all relevant legislative provisions so the constitution properly reflects the current state of the law and best practise and can be read without constant reference to referenced sections in legislation

Pigott Stinson regularly reviews constitutions on behalf of registered clubs.

If your board would like our firm to review your club’s constitution, and provide advice on recommended amendments, please do not hesitate to contact us.

For more information please contact Bruce Gotterson on 8251 7777 or at b.gotterson@pigott.com.au.

 

This article is intended to provide general information in summary form on a legal topic, current at the time of publication.  The contents do not constitute legal advice and should not be relied on as such. Formal legal advice should be sought in specific circumstances.