Explanatory Statement – Special General Meeting
At a Special General Meeting (SGM) to be held on 30th March, 2019, the QSA Inc Executive Committee will be asking members to consider a proposal to transition QSA Inc from an incorporated association to a company limited by guarantee (CLG).
This changes the legal status of the organisation, its governance arrangements and some reporting requirements however, for members there will be very few changes. One change however will be that, in a CLG, the members of the company have limited liability. If the company is wound up, the liability of the members is limited to the nominal amount that they have guaranteed. In our case, the guarantee is proposed to be a nominal amount of $2 per member.
The objective of this statement is to outline what will change and what will stay the same so that members can feel well enough informed before the Special General Meeting.
QLD Stoma Association Inc was established more than 50 years ago and since that time, while it has remained committed to the same purpose and values, it has grown considerably. It is now a larger organisation with a greater membership base and staff, providing more services to the ostomate community and growing its community presence. In addition, the external environment in which we operate has changed significantly.
The commencement of the Australian Charities and Not-for-Profit Commission (ACNC) Act 2012 and the recent introduction of the Charities Bill into Federal Parliament has brought about significant changes to reporting obligations of charities. It means that, currently, QSA Inc has dual reporting obligations for the management committee.
Some time ago, an amendment was made to the Associations Incorporation Act which means that an incorporated association may transition to a CLG without there being any change of entity. This has the effect of making the process relatively seamless and a low-cost strategy with no revenue implications or the need to change the ABN.
It is also becoming clear that the greater certainty and clarity surrounding the obligations of directors and the rights of members of a CLG (governed by the Corporations Act) are making them the vehicle of choice for government funding arrangements, including potentially the Stoma Appliance Scheme. The Executive Committee believes that transitioning to a CLG will put QSA in a stronger position into the future.
To effect the change in status a special resolution must be passed at an SGM and a new constitution adopted. The new constitution will keep the existing objects of QSA Inc and will satisfy Australian Charities and Not for Profit Commission (ACNC) and Australian Taxation Office (ATO) requirements for being a registered charity. It will also contain the required provisions for a CLG. The new constitution is currently being drafted and will be available for members to view shortly
Members will vote at the SGM. If the resolutions tabled at the meeting are successful, the management committee elected at the 2018 AGM will transition to being the board of directors and the president elected at the AGM will transition to the Chair when the change of legal status is confirmed. This process will take approximately eight to 10 weeks. In future years, members will continue to elect directors to the board. The board of directors will then appoint the Chair from within. With the exception of a Company Secretary, there will be no other office bearer positions on the board with the entire board taking responsibility to ensure tasks previously associated with office bearer positions are completed and competently managed. The Board believes this will contribute to enhanced governance for QSA.
What will stay the same:
- The charitable objects of the old constitution, although updated to reflect the scope of the organisation, will be mirrored in the new constitution,
- The existing membership categories remain as per the existing constitution,
- QSA members will retain the same rights and responsibilities as they currently enjoy under the incorporated association including being able to nominate and elect Board members – with the exception of being able to elect the president – this will be done from within the elected board of directors, and
- Members of the management committee elected at the 2018 AGM, prior to the adoption of the new constitution will remain in office as directors of the CLG.
What will change:
- The legal structure will change,
- Reporting requirements will change, especially with respect to reporting to the ACNC,
- A new constitution will be adopted,
- A company secretary will be appointed,
- Some terms will change, for example the ‘management committee’ will become the ‘board of directors’,
- Queensland Stoma Association Inc will become Queensland Stoma Association Ltd,
- Office bearer positions (with the exception of the Chair and the Secretary) will no longer exist,
- Election of the Chair (formally President) will be done from within the elected board of directors,
- By becoming a member of Queensland Stoma Association Ltd, members will agree to “guarantee” the property of the company up to a nominal amount. It is proposed that the nominal amount should be $2 per member.
Notice of Meeting – Special General Meeting 30th March 2019