Are you a corporation established under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act)? Is your rule book up to date? Do you understand how to make changes to your rule book?
Why are rule books important?
Rule books are specific to each corporation and set out how the corporation should be run. They include the mandatory rules set out in the CATSI Act; replaceable rules which have not been amended; and additional rules which are specific to the corporation.
Rule books also set out how a corporation is to maintain accountability to both internal (i.e. members, employees and board members) and external (i.e. regulatory agencies, funding bodies and the public) stakeholders. Rule books also operate as a contract between:
The corporation and each member;
The corporation and each director and corporation secretary; and
a member and each other member.[1]
When does a rule book need to be amended?
When the law changes, or a corporation’s structure and objectives evolve, the rule book should be amended. This is to ensure that the rule book meets the requirements of the law and reflects the governance structure and procedures which are appropriate to the corporation’s current activities and governance obligations.
How can changes to a rule book be made by corporation members?
A corporation can change its rule book by passing a special resolution which has the support of at least 75% of the corporation’s members at a general meeting.[2] If a corporation’s rule book specifies any additional requirements for making amendments, these must also be complied with.
Once the special resolution is passed and recorded in the minutes, amendments to the rule book must be lodged with the Office of the Registrar of Indigenous Corporations (The Registrar) within 28 days. The Registrar should be provided with:
a copy of the special resolution;
the relevant minutes of the general meeting;
statements from two of the corporation's directors confirming that amendments were passed in accordance with rules; and
a copy of the amended rule book.
The Registrar will then consider whether the proposed changes meet the requirement for rule books as set out in the CATSI Act, and if so, approve and register the changes to the rule book.[3] If the Registrar declines the proposed changes, they must notify the corporation within 28 days after making that decision.
What are the key things to consider when amending a rule book?
Review the corporation’s core business – consideration should be given to how a corporation has changed since the rule book was last amended, and whether there are any areas in which the effectiveness of how the corporation is run can be improved.
Clear communication and consultation – members should be consulted by the board before, during and after the process of changing a rule book. This will help them to provide meaningful input into the proposed changes and understand how the amendments will affect their duties and rights.
Seek legal advice if your rule book requires substantial amendments or if you are not sure how to best review your rule book and governance arrangements.
How can Terri Janke and Company help?
Terri Janke and Company can assist CATSI corporations in:
Reviewing their governance arrangements to ensure that they are appropriate to the corporation’s current and prospective activities
Drafting appropriate amendments
Assisting with the process of making rule book amendments.
[1] CATSI Act s60-10.
[2] CATSI Act s69-5.
[3] CATSI Act s69-30.