All corporations must have a rule book that sets out the corporation's name, its aims, a process for resolving disputes and any other matters the corporation wishes. For example, a rule about who can become a member. The rule book must comply with the CATSI Act.
Having a rule book is a requirement for registering a new corporation. It is also important that corporations review their rules regularly to make sure they still work for them. If there are rules that don't suit your corporation you can change them as long as they meet the CATSI Act requirements.
A rule book is an important document which must be followed by all the members and directors of a corporation.
How to change a rule book
Step 1: Draft your changes or a whole new rule book
- Usually the directors, or a working group, review your current rule book and draft the changes.
- You may want to consider a complete overhaul (a totally new rule book) or you might just want to fix a few small errors or make a couple of updates. It's up to you.
ORIC can assist you with reviewing:
ORIC can help you draft your rules by reviewing drafts and providing feedback—request assistance through info@oric.gov.au.
ORIC has a rules re-design workshop that covers rule requirements under the CATSI Act and also provides examples of governance structures. ORIC facilitates discussion and decision-making by your corporation about rules for your corporation. The group can use the decisions to draft a rule book. After the workshop ORIC can help refine the draft rule book. Request a workshop through training@oric.gov.au.
Step 2: Tell all the members about it
When the directors are satisfied with the changes, they should call a general meeting (either a general meeting or at the AGM) for the members to consider the proposed changes and vote on it.
The notice of the meeting should include:
- the date, place and time of the meeting
- a copy of the proposed special resolution to change the corporation's rule book
- a copy of the proposed rule book changes—this could be a list of the proposed changes or a copy of the entire proposed rule book depending on if the changes are a few or replacing the whole rule book.
The notice and a copy of the proposed rule book changes should be sent to all members of the corporation according to the requirements of your current rule book. If you have lots of members you can make copies of the draft rule book available at your corporation’s document access address or registered office address and let everyone know how they can see a copy.
Example notice with a special resolution for adopting a new rule book:
- notice of general meeting with example special resolution inserted
(Remember—you need to insert the exact words of the special resolution in both the meeting notice and meeting minutes)
Other notice templates for meetings of members (you can change rules at any meeting of members):
Step 3: Members vote on it
At the general meeting (which is usually the AGM):
- Make sure a quorum is present at all times.
- Members will need to pass the special resolution. This means at least 75 per cent of the votes cast by members entitled to vote on the resolution have agreed to it.
- Keep accurate minutes of the meeting, and make sure the chairperson signs them after the meeting.
Example words for a special resolution for adopting a new rule book:
- example special resolution for inserting into meeting minutes
(Remember—you need to insert the exact words of the special resolution in both the meeting notice and meeting minutes)
Other minute templates for meetings of members:
Step 4: Get the Registrar's approval
After the meeting has been held and the special resolution passed, you can lodge the change online using the 'Request to change corporation rule book' form. You will need to attach:
- A copy of the notice for the meeting which includes the resolution.
- A copy of the minutes of the meeting which include the resolution.
- A copy of the proposed rule book change or whole new rule book.
If you can't lodge online, you can use the PDF form—Request to change corporation rule book.
The Registrar decides whether to approve the proposed rule book changes.
Remember—the new rule book doesn't take effect until the Registrar has approved and registered it. Until then, you should follow your current rule book.