Several key amendments to the Registered Clubs Act (“the Clubs Act”) came into effect on 1 December 2021. Registered clubs also need to be aware of the amendments to the Corporations Act which came into effect on 1 April 2022.
What follows is a summary of some of the proposed amendments to the Corporations Act, the Clubs Act and what they may mean for your club.
CORPORATIONS ACT AMENDMENTS
Options for Sending Notices of Meeting Electronically
The key change to the Corporations Act that will assist clubs is that notices of meeting can be sent to members by electronic means, even when members have not previously elected to receive notices via electronic means. This is a movement away from the former requirement which only allowed clubs to send notices electronically to members if a member had provided written consent to do so.
Sending notices of meeting via electronic means can be (and in our view, should be) made the default position of sending notices by clubs. This approach will save clubs the costs and administrative burden involved with printing and posting notices of meeting to their membership bases.
If you have the email address or mobile number of the member:
There are several ways to ‘send’ notices of meeting to members electronically, including by:
- sending a PDF of the notice of meeting via email (i.e., the notice of meeting can be sent as an attachment to the email;
- posting a PDF of the Notice on the club’s website and sending;
- an email containing a QR code or a hyperlink to the notice of meeting; or
- an SMS containing a QR code or a hyperlink to the notice of meeting.
If you do not have the email address or mobile number of the member:
Clubs can send members electronic notices of meeting even if a member has not elected to receive notices electronically.
However, where a member has not provided either a mobile number or an email address to the club, those members should receive a physical copy of either:
- the entire Notice of Meeting in the usual way; or
- a physical document posted to the address of the member containing sufficient details of how the member can access the Notice. For example, a club may provide notice of the meeting by sending a postcard to the member containing details of the meeting and:
- a QR code which links to the notice of meeting published on the club’s website; or
- details of the website address of the notice of meeting published on the club’s website.
Members can elect to receive a hard copy of the Notice (and they must be informed of this option):
To receive a hard copy of the notice of meeting, a member must notify the club in writing at least thirty (30) days before the relevant meeting that they are electing to receive the entire notice of meeting in physical form. The club must comply with such a request if it is received at least thirty days prior to a meeting.
Clubs should be aware that the amendments to the Corporations Act now require clubs to advise members at least once in each financial year that they can elect to receive Notices either via electronic means or hard copy. This requirement can be satisfied by placing a notice on the club’s website advising members that they can elect to receive notices of meeting either in hard copy or electronically.
For the avoidance of doubt, if a member has not made an election to receive the notice of meeting either in electronic or physical format, the club can choose to send the member the notice of meeting to the member electronically or by hard copy.
CLUBS ACT AMENDMENTS
Displaying the address of applicants for Membership
The recent amendments to the Clubs Act no longer require a club to:
- obtain the occupation details of an applicant for membership; and
- display the address of applicants for membership on the club noticeboard.
These are good practical changes, particularly the removal of the need for the address of an applicant to be placed on the noticeboard as clubs have often expressed to me over the years the conflict this obligation has with privacy principles in general.
The address of a member of a club is personal information that is protected under the privacy legislation in force in NSW. Prior to the recent amendments to the Clubs Act, a club could rely on the exemption in the privacy legislation that provides that if a club is required by law to provide protected personal information, the club will not be breaching the privacy legislation by complying with the Clubs Act.
The problem with a club having the requirement to place the address on the noticeboard contained in a club’s constitution is that the protection in the privacy legislation mentioned above will no longer be available as the Clubs Act no longer requires a club to display the address of applicants for membership.
That is, a club should not put the address of applicants for membership up on the noticeboard as it will be breaching privacy legislation, but to not display the address would conflict with its own constitution. The best way forward is to delete the requirement to display an address of an applicant for membership from the constitution. The club would then be complying with the privacy legislation and the club’s constitution.
There is no longer a requirement for clubs to require members to pay an annual subscription. The minimum annual subscription has for some time been two dollars. It is important to note that there is nothing in the Clubs Act which prevents a club from requiring members to pay an annual subscription and we anticipate that most clubs will continue to do so.
The recent amendments to the Clubs Act do provide that if the rules of a club require members to pay an annual subscription, then the rules must specify the amount of the subscription or the procedure for determining the subscription.
For many clubs, this amendment will have no practical effect because they will continue to charge annual subscriptions and their constitutions already set out a procedure for setting annual subscriptions (for example, the board sets subscriptions and other fees by way of board resolution).
Other clubs may be interested in not requiring members to pay subscriptions to attract a new membership base, for marketing purposes, or to avoid the administrative hassle involved in processing and collecting subscriptions.
If those clubs have a constitution which requires members to pay a minimum annual subscription of no less than $2, this requirement will need to be deleted before the club can stop charging members an annual subscription.
We have been asked by several clubs how a member can be either a ‘financial’ or a ‘non-financial’ member if the club does not charge annual subscriptions. The answer is the operation of the renewal process for members who are not required to pay an annual subscription to be required to sign some form of renewal of membership by a certain date, otherwise they cease to remain a ‘financial’ member and can be removed from membership.
Additional Changes to the Clubs Act
The board of a club is now only required to meet once in each “quarter” of the year (as opposed to monthly). A “quarter” means a period of three months ending on 31 March, 30 June, 30 September, or 31 December.
Under the Clubs Act, club boards can meet as often as they require (provided they meet at least once per quarter), yet many existing club constitutions require the board to meet monthly. If a club constitution requires a club to meet monthly and it fails to do so, it will be in breach of its constitution. As a result, club constitutions should be amended to remove the requirement for boards to meet monthly.
This will be a helpful amendment as sometimes it may be difficult to meet in a particular month due to directors being away or otherwise not available (for example, we are aware that several clubs have difficulty in holding board meeting during December due to the Christmas and New Year’s period).
Additionally, a new deemed rule provides that a club, the board of the club or committee of the club may:
- distribute a notice of, or information about, a meeting or election of the registered club, governing body, or committee by electronic means; and
- hold a meeting at which all or some persons attend by electronic means but only if a person who speaks at the meeting can be heard by the other persons attending; and
- allow a person entitled to vote at a meeting of the registered club, governing body, or committee to vote in person or by electronic means.
A deemed rule is a legislative provision which applies to a club even if the rule is not contained in the club’s constitution.
Therefore, under the changes identified above, the club, board, or committee could use electronic means for the above purposes even if the constitution does not expressly allow it to do so.
The best approach in our view, would be for a club to amend its constitution with member approval to incorporate the deemed rule into the constitution so members are aware that the board can proceed in that manner.
UPDATING THE CONSTITUTION
It is likely that the recent amendments will require most (if not, all) clubs to update their constitutions.
In our experience, many club constitutions need updating to accommodate not only the legislative changes that have recently occurred but to bring the constitution up to speed with best industry practice.
To this end, many club constitutions can be considerably improved by providing greater powers for the chairperson, the Board, and the Secretary to operate the affairs of their club, including updating the rules regarding:
- disciplinary proceedings;
- general meetings, annual general meetings, board meetings and committee (sub-club) meetings;
- the conduct of the election of the board;
- the removal of undesirable persons from the premises of the club.
Accordingly, we recommend that clubs have their constitutions reviewed and if required, updated to ensure they comply with relevant legislation (including the recent changes to the Clubs Act and the Corporations Act) and best practice.
If you would like any advice on the recent amendments to the Clubs Act and or the Corporations Act, or you would like us to review and update your club’s constitution, please contact your usual contact at Pigott Stinson or any member of the Clubs team on 8251 7777 or by email as below.
Further Information and Contact Details
Should you wish to discuss any aspect of this Newsletter or want any legal advice about these matters, please contact any member of the Clubs team on 8251 7777 or by email: