10 August 1999 [2]

In this aliaNEWS broadcast...

Why incorporate under Corporations Law?

Draft new constitution and replaceable rules

Wind up/audit

2000 and on...

Why incorporate under Corporations Law?
The Association voted to incorporate at the October 1998 Extraordinary General Meeting. The next two steps in that process are to incorporate the new organisation and wind up the Association under Royal Charter and transfer assets over to the new organisation. A preliminary draft of the constitution for the new organisation has been prepared, and at the Annual General Meeting on 17 August 1999, the Association is seeking the agreement of members to wind up voluntarily so that the new organisation can be incorporated and all assets may be transferred to that new organisation.

Our auditor has advised that advantages of incorporation include:

incorporation is consistent with the majority of not-for-profit Associations;
the Association would be governed by Corporations Law, which is consistently updated to protect the interests of shareholders (members), creditors and directors, whereas under the Royal Charter any updates are at our discretion (and subject to approval of the governor-general);
the directors have specified and more onus responsibilities under the Corporations Law, which benefit both members and outside parties;
provides limitation of liability of the members to the net assets of the Association; and
has strict reporting deadlines with the financial statements being available to members being no more than four and one-half months after balance date, with an AGM being required within five months of balance date.

Draft new constitution and replaceable rules
The Renewal Working Group met on 6 August 1999 to consider the responses to the paper Into the 21st century: the future for ALIA on the objects, governance and institutional participation, and to make recommendations on their inclusion in the draft constitution and replaceable rules. This preliminary draft will be available as a web-based document on ALIAnet for members to view by 12 August 1999. A report on members responses to the discussion paper will be available in the next few weeks.

The content of the draft constitution and rules is very similar to the Royal Charter, and includes provision for the transfer of members, divisions, awards etc, though of course it is written in the language required by the Australian Securities and Investments Commission and Corporations Law. We have consulted those of a number of other associations/organisations limited by guarantee in putting our draft together. The constitution comprises the Objects and specific legal clauses, (currently two pages) and any changes to this section must be approved by the ASIC. The replaceable rules comprise much of the content of our current By-Laws and Regulations. The replaceable rules may be changed with the agreement of the 'Board of Directors'.

Pending the outcome of the AGM the draft will be considered in detail by the General Council and our advising lawyers, with a view to finalisation at the October 1999 General Council meeting for submission to the ASIC for incorporation.

Wind up/audit
We sought advice from our auditor, Mike Empson, of PricewaterhouseCoopers, on ways we could undertake the wind up and transfer of assets with as little disruption to divisions as possible. He has suggested that due to the numerous bank accounts for ALIA1 (under Royal Charter) for divisions, and that they are currently in the process of arranging events such as conferences and other activities between now and the end of the financial year, we could operate two management accounts ALIA1 and ALIA2 (new organisation) simultaneously until 31 December 1999, when it is suggested the liquidation of ALIA1 be effective from. In practical terms, the division bank accounts would be closed as of 31 December 1999 and new accounts will have been set up to become operative from 1 January 2000. ALIA2 would be receiving assets, such as the 2000 membership fees, and it is expected would be able to provide a 'loan' to the Association's activities until all assets are transferred from ALIA1. The Royal Charter would then be repatriated by the governor-general. The 1999 audit should be able to be undertaken as part of the liquidation - though divisions would need to be prepared to provide all the necessary financial information within the timeframe required by the liquidator.

This suggested process would enable systems to be put in place to overcome the division's bank accounts change over problems as well as enabling the new organisation to settle in gradually. It would avoid unnecessary anxiety for members and staff by such a short changeover if the liquidator proceeded straight after the General Meeting.

Subject to the outcome of the AGM a further meeting will be held in the first week of September 1999 between the liquidator/auditor, legal adviser, executive director and finance manager to put together a detailed program for the liquidation, audit and incorporation so that all those concerned may be informed. Matters to be considered include the voucher fund (vouchers will be re-issued under the new organisation), tax status of the organisation, registration of business names, transfer of contracts, leases, borrowing arrangements, investments, staffing arrangements, titles, and transfer of bank accounts.

2000 and on...
With the incorporation the Association will be better placed to forge ahead to complete the Charter of Renewal, and to become the flexible, responsive and dynamic organisation for the information sector sought by members in their responses to the McCallum/Lunn Report, the ALIA/ACLIS Leadership Committee, the Charter of Renewal, and the Renewal Working Group discussion paper.

Craig Anderson
ALIA president

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