Winding Up an Association
An incorporated association may wind itself up voluntarily by passing a special resolution of members in general meeting.The ACT Supreme Court has powers to wind up an association if it becomes inactive, unable to pay its debts, or operates contrary to its objects.
There are similar mechanisms for winding up companies limited by guarantee under the Corporations Act 2001. However, legal advice should be sought in taking such a course of action.
The surplus property, including remaining funds and assets, of an incorporated association cannot be distributed among the members. Any surplus property may be vested in another organisation if that organisation:
- has substantially similar objects or purposes to the association being wound up;
- is non-profit; and
- provides in its rules for surplus property to be passed to a similar organisation on dissolution or winding up.
Alternatively, surplus property may be vested in a fund, authority or institution specified in the Income Tax Assessment Act 1966. These entities usually have charitable purposes.
The surplus property of a company limited by guarantee may be distributed among its current members in accordance with the Corporations Act 2001.
Legal and accounting advice should be sought on these matters if necessary. For more information, consult the Incorporated Associations section of the ACT Office of Regulatory Services website.
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