Clubs, Associations and Businesses
You’ve probably heard people talking about clubs, associations and businesses and maybe thought these words all meant the same thing – groups of people who work together to run activities, plan things and maybe make things, including money. In most cases, they’re about the same but there’s a couple of differences we should know about, including some of the legal differences. Firstly, you’ve probably heard of ‘companies’. They’re also called ‘businesses.’
These are set up legally to make money for their owners. They might do a number of other things – manufacturing, helping people, looking after children, entertainment – but the reason they exist is to make money for their owners. However, that’s not what clubs and associations are all about. These groups come together for reasons other than to make money. These are just like other groups of people who do things like play sports or meet socially but they have set up a formal organisation that is recognised by law.
The easiest way to do this is to set up an incorporated association. This means the group can own things together, get money from the government or even open a bank account. It can make money – just like a business – but the money must be put back into the association, not given to members.
Unlike a business, there are no owners of an association. The association has all the powers of an individual person – it can own land, sign a lease, employ other people and it can continue forever, even if the original members move on. Importantly, if the group causes damage to someone, the association can be sued for damages, rather than the members being sued personally. Some incorporated associations in your area might include sporting clubs, refuges and community centres.
NOTE: Incorporated associations’ will mostly be called ‘organisations’ in this section.
The NSW Department of Fair Trading has more information about Incorporated Associations at this website – https://www.fairtrading.nsw.gov.au/associations-and-co-operatives
To make sure everyone in the group has a say in decisions, associations have elections to give certain members the authority to make decisions on behalf of the whole group. The members who have been elected to make decisions for the whole group are called a board or sometimes the management committee. They are not paid but the board can employ people, including managers and coordinators, to do the work of the association.
What do the Different Job Titles Mean?
- Managers are not members of the management committee. Managers are people employed by the management committee to run sections of the organisation. The overall manager is sometimes called the General Manager or the Executive Officer and is the person who reports to the management committee about how the organisation is going. In larger organisations, the different managers might be responsible for different sections. Each section will usually have a coordinator in charge of the staff in that section and also for making sure their section runs properly. Management committee members are sometimes called directors or board members.
- The director with the main responsibility for keeping an eye on the organisation’s money is called the treasurer.
- The director with the main responsibility for the administration of the board is called the secretary.
- The director with the main responsibility for running the meetings is called the chair or chairman. The chairman of the meeting needs to make sure that all board members have the opportunity to put their views forward and to make sure there is agreement on all decisions made.
- The head director of the board is called the president but is often referred to as the chair or chairman because this person usually runs the meetings as well.
The NSW Department of Sport and Recreation has more information and resources about the board’s role at its website, which you can find at this link of the Running Your Club website – www.sportandrecreation.nsw.gov.au/sportsclubs/ryc.asp
What is the Board’s Job?
When they are doing their job as board members, they should:
- Act honestly
- Be thinking of what is best for the group rather than for themselves. This means they shouldn’t be using their position to get extra benefits – either as pay or by getting extra business for themselves or their family.
- Understand that board papers and discussions are confidential and shouldn’t be discussed with non-board members.
The board has two main jobs which are done on behalf of all members:
- Setting rules (‘policies’) for running the day-to-day activities of the organisation and making sure everything is legal.
- Planning for the future on behalf of the organisation. The Succession Planning section has step-by-step details on how to plan for future years.