Riding for the Disabled Association of Australia Inc Riding Develops Abilities

Towards a new constitution

Over the past few years the Riding for the Disabled Association of Australia Inc (RDAA) has been working to respond to an initiative of the Australian Sports Commission (ASC) to update the Constitution and governance structures of RDAA.

The information that follows aims to explain the rationale behind the constitutional reform and the work that the Constitutional Sub-Committee of the RDAA Council has been doing. It also explains the rationale behind some of the content of the draft Constitution that is currently being circulated to States and Centres.

What is the bigger picture?

It is often said about changes like this that there is either a hidden agenda or a bigger picture. In the case of the new RDAA Constitution, there is no hidden agenda, and no change to the management or control of any of the assets held by States or Centres anywhere in Australia. There is, however, a bigger picture.

It is RDAA’s intention to take steps to:

strengthen RDA as a cohesive three tiered Australian body (National, States and Centres)
provide a better vehicle for communications between all three levels of RDA
improve the governance of RDA with up to date ASIC & Australian Sports Commission compliance and
improve the efficiency of RDAA management processes.

Why do we need a new Constitution?

There have been a number of driving forces that have led the RDAA Council to consider a new Constitution. They include:

The body that oversees our activities and funding – the Australian Sports Commission - has suggested that the RDAA Constitution needed to be revised to meet current standards.
It is incumbent upon all organisations to continually monitor and refresh the governance of the organisation to ensure its ongoing effectiveness and for the protection of its members and office bearers.
The attempts to amend the old Constitution to make some of the changes suggested by the solicitor recommended by the ASC, became bogged down. The Council later agreed to ‘start over’ and develop a new version of the Constitution.
The current draft of the new Constitution have been taken from – or based upon – model documents provided by ASIC – the regulatory body that is charged with approving and monitoring our business activities.

Why Should RDAA Change to a Company Limited by Guarantee?

At present RDAA is incorporated in the state of South Australia. The new constitution has been developed to allow the organisation to become a Company Limited by Guarantee incorporated nationally. This move has been recommended by the RDAA solicitor and by the ASC and was endorsed by the RDAA Council at the October 2004 meeting.

RDAA has received the following legal advice on this matter:

An Association incorporated under a State’s association incorporation legislation is limited to the conduct of operations within that State unless it has been registered in other States in which it proposes to operate. RDAA is currently only registered in South Australia even though we operate nationally. Switching to a Company Limited by Guarantee, administered under the Corporations Act, will allow us to do business anywhere in Australia without further registration.
While the reporting requirements of companies limited by guarantee under the Corporations Act are intended to be greater than those for an incorporated association, in practice, the requirements are very similar.
The obligations imposed on directors of companies apply, generally speaking, equally to directors/committee members of incorporated associations; however, they are more clearly defined in the Corporations Act
Raising finance may be easier through a corporate structure as financiers tend to be more likely to extend credit to companies than other forms of business entity, as companies are more widely accepted in the commercial community.
Incorporated associations are effectively taxed as companies, so there is no tax disadvantage to the Company Limited by Guarantee.
The Corporations Act has clear provision for companies to indemnify their officers and auditors in certain circumstance: similar provisions are not included in the various association’s incorporation statutes.
Public perception or status indicates the view that ‘serious’ or ‘more sophisticated’ not-for-profit organizations use the Company Limited by Guarantee structure rather than the incorporated associations’ regime.

Whilst RDAA also encourages States and Centres to consider becoming Companies Limited by Guarantee, however there is no time limit on this, nor indeed is there any compulsion to do so.

Your Views

Following an extensive consultative process the RDAA Constitutional Sub-Committee in association with Clayton Utz Lawyers have developed the following draft constitution. Your constructive comments on the attached Constitution are welcome. You can forward written comment via your State Office:

Click here to view Draft Constitution
(link will open in a new window)

When will the RDAA council vote on the proposed new constitution?

“At the Extraordinary General Meeting of Riding for the Disabled Association of Australia, Inc to be held on April 29th, 2006, the members will be invited to Resolve that a Company Limited by Guarantee named Riding for the Disabled Association of Australia Limited be formed to take over the activities, duties and operations of the aforementioned association, together with the assets and members thereof, and that the draft Constitution distributed on January 27th, 2006 be adopted as the Constitution of the new company subject to clarification of the taxation issues by Clayton Utz.”

	Riding for the Disabled Association of Australia Inc R iding D evelops A bilities
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Home News Merchandise Positions Vacant Awareness Create a Logo Benefits Brochure Coming Events Contact Us Governance History Information Mission National Championships Para Equestrian Project CONNECT State Contacts Sponsors	Towards a new constitution Over the past few years the Riding for the Disabled Association of Australia Inc (RDAA) has been working to respond to an initiative of the Australian Sports Commission (ASC) to update the Constitution and governance structures of RDAA. The information that follows aims to explain the rationale behind the constitutional reform and the work that the Constitutional Sub-Committee of the RDAA Council has been doing. It also explains the rationale behind some of the content of the draft Constitution that is currently being circulated to States and Centres. What is the bigger picture? It is often said about changes like this that there is either a hidden agenda or a bigger picture. In the case of the new RDAA Constitution, there is no hidden agenda, and no change to the management or control of any of the assets held by States or Centres anywhere in Australia. There is, however, a bigger picture. It is RDAA’s intention to take steps to: strengthen RDA as a cohesive three tiered Australian body (National, States and Centres) provide a better vehicle for communications between all three levels of RDA improve the governance of RDA with up to date ASIC & Australian Sports Commission compliance and improve the efficiency of RDAA management processes. Why do we need a new Constitution? There have been a number of driving forces that have led the RDAA Council to consider a new Constitution. They include: The body that oversees our activities and funding – the Australian Sports Commission - has suggested that the RDAA Constitution needed to be revised to meet current standards. It is incumbent upon all organisations to continually monitor and refresh the governance of the organisation to ensure its ongoing effectiveness and for the protection of its members and office bearers. The attempts to amend the old Constitution to make some of the changes suggested by the solicitor recommended by the ASC, became bogged down. The Council later agreed to ‘start over’ and develop a new version of the Constitution. The current draft of the new Constitution have been taken from – or based upon – model documents provided by ASIC – the regulatory body that is charged with approving and monitoring our business activities. Why Should RDAA Change to a Company Limited by Guarantee? At present RDAA is incorporated in the state of South Australia. The new constitution has been developed to allow the organisation to become a Company Limited by Guarantee incorporated nationally. This move has been recommended by the RDAA solicitor and by the ASC and was endorsed by the RDAA Council at the October 2004 meeting. RDAA has received the following legal advice on this matter: An Association incorporated under a State’s association incorporation legislation is limited to the conduct of operations within that State unless it has been registered in other States in which it proposes to operate. RDAA is currently only registered in South Australia even though we operate nationally. Switching to a Company Limited by Guarantee, administered under the Corporations Act, will allow us to do business anywhere in Australia without further registration. While the reporting requirements of companies limited by guarantee under the Corporations Act are intended to be greater than those for an incorporated association, in practice, the requirements are very similar. The obligations imposed on directors of companies apply, generally speaking, equally to directors/committee members of incorporated associations; however, they are more clearly defined in the Corporations Act Raising finance may be easier through a corporate structure as financiers tend to be more likely to extend credit to companies than other forms of business entity, as companies are more widely accepted in the commercial community. Incorporated associations are effectively taxed as companies, so there is no tax disadvantage to the Company Limited by Guarantee. The Corporations Act has clear provision for companies to indemnify their officers and auditors in certain circumstance: similar provisions are not included in the various association’s incorporation statutes. Public perception or status indicates the view that ‘serious’ or ‘more sophisticated’ not-for-profit organizations use the Company Limited by Guarantee structure rather than the incorporated associations’ regime. Whilst RDAA also encourages States and Centres to consider becoming Companies Limited by Guarantee, however there is no time limit on this, nor indeed is there any compulsion to do so. Your Views Following an extensive consultative process the RDAA Constitutional Sub-Committee in association with Clayton Utz Lawyers have developed the following draft constitution. Your constructive comments on the attached Constitution are welcome. You can forward written comment via your State Office: Click here to view Draft Constitution (link will open in a new window) When will the RDAA council vote on the proposed new constitution? “At the Extraordinary General Meeting of Riding for the Disabled Association of Australia, Inc to be held on April 29th, 2006, the members will be invited to Resolve that a Company Limited by Guarantee named Riding for the Disabled Association of Australia Limited be formed to take over the activities, duties and operations of the aforementioned association, together with the assets and members thereof, and that the draft Constitution distributed on January 27th, 2006 be adopted as the Constitution of the new company subject to clarification of the taxation issues by Clayton Utz.”