In this video, we’re going to cover the basics of a constitution and why it’s important for your club.
All committee members should have a good understanding of the constitution, also referred to as the “rules” of your club.
Here are some of the questions to ponder before we get started:
- Do you know why your club needs a constitution?
- What is the purpose of a sports club constitution?
- Under what circumstances do you think that your constitution may need to be updated?
The two most common types of governance structures for not-for-profit organisations in Queensland are incorporated associations and public companies limited by guarantee.
Most Queensland clubs are established under the Associations Incorporation Act 1981, which we’ll refer to as “the Act”. As this is the most common legal structure this video will refer to incorporated associations.
Incorporation gives an organisation the powers of an individual. This means that it can own assets, hold bank accounts and insurance policies, enter into contracts like leases and sue and be sued, all in its own name. An incorporated association is therefore a legal entity in its own right, separate from its members.
This separation provides a certain level of legal protection, which limits the likelihood that management committee members can be held personally responsible for a club's debts and liabilities.
Although this protection is not absolute, it does offer peace of mind for management committee members who carry out their responsibilities in good faith, with care and diligence, in the best interests of the club and within the law.
To receive the benefits of being incorporated, your club must follow certain rules that link with the Act. It is these rules which are spelled out in your constitution, hence why it may even be called your ‘rules’.
Meeting minimum legal obligations is actually quite easy and for this reason, clubs should always be striving to be great, rather than just meeting minimum standards.
The purpose of the constitution is to provide a framework for why your club exists and broadly, the process for how it is to operate. It covers aspects such as membership, management committee structure, meetings, and financial management. The constitution doesn’t need to go into detail about day-to-day operations. That’s usually addressed in more operational documents, like bylaws or an operations manual.
You can also see the constitution as a contract between the club and its members, as it addresses their rights and obligations.
It provides one point of truth for the club’s rules and it should be readily accessible, particularly for clarification to avoid disputes and conflict.
There are many reasons why it’s important to review your constitution, such as whenever there are major changes to your club, or to ensure that it aligns with the Act, including any updates to the Act that may have occurred since your constitution was last updated.
It's therefore a good idea to revisit your constitution about every five years.
As a committee member, you must always act in accordance with the constitution, so it’s important that you have read and are familiar with its contents.
Here are some frequently asked questions regarding incorporation and constitutions.
Why do we need a constitution?
Firstly, to comply with the Act. Secondly, your constitution is a single point of truth that provides clear rules on how your club is governed, including general meetings, management committee structure and membership types.
What are the model rules?
The Model Rules are a standard set of rules available from the Office of Fair Trading, which a club can adopt as its constitution. Apart from some specific sections, the Model Rules must be adopted in their entirety.
How do we change our rules?
Any change to an incorporated association’s constitution requires approval of 75% or more of the club’s eligible voting members who are present and voting at a general meeting. The changes do not take effect until lodged and registered with the Office of Fair Trading.
Updating your constitution is a great opportunity to take a deep dive into how your club runs. By focusing on the people who will use the document, the process of the review itself will often identify opportunities to improve your club’s structure, governance, member protection and operational practices.