Introduction
The registration of associations to promote common interests of certain groups of people or organisations is common. In this article I look at a constitution of an association as it is a key document required for the registration.
Key provisions in a constitution
Some of the key provisions in the constitution of an association are explained below.
Name of association
The association ought to have a name and that name has to be included in the constitution. Abbreviations may be added.
Mission and objects
This part is very important. It states the purpose of the association. Examples may include “to promote the interests of small scale gold miners” or “to promote the interests of commuter omnibus operators who operate in urban areas”.
Membership
This is also a very important part and covers areas as summarised below:
- The people or organisations who qualify to join as members and those excluded.
- Minimum and / or maximum number of members.
- Suspension, resignation and termination of members.
- Payment of subscriptions by members.
Governance structure
The governance structure may include the following:
- The members as explained above, who are the equivalent of shareholders in a company.
- Council or Board of directors appointed by the members, who shall report to the members in general meetings.
- Secretariat who manages the day-to-day affairs of the association, being the equivalent of management in a company.
Council or board of directors
This component of the governance structure may be called by any other suitable name chosen by the members. The provisions cover the following:
- That the council or board has overall oversight role over the association.
- Composition of the council or board of directors.
- Specific areas of oversight such as strategies, policies, risks, opportunities, membership, etc.
- Appointment, resignation, removal, replacement of council or board members.
Secretariat
- The responsibility of the secretariat on the day to day affairs of the association.
- Structure of the secretariat.
General meetings of members
Provisions include frequency of meetings, notices of such meetings, agendas, quorum, decision making, voting if necessary.
Meeting of council or board of directors
Provisions normally include frequency of meetings, notices of such meetings, quorum, decision making, decision that can be made by the council or board and those that require referring to the members.
Finances
This may cover subscriptions to be paid by the members, restricted use of the association’s funds to the objects of the association, opening of bank accounts and signing thereon, borrowing powers, if any.
Book of accounts and financial reporting
An association has to keep proper books of accounts and report to council, board of directors and members.
Dispute resolution
It is common to include dispute resolution mechanisms in the constitution. These may include mediation, arbitration or litigation.
Legal status of the association
It may be provided that, upon its registration, the association shall have its own legal existence, and may sue or be sued.
Non – profit character
It is usually stated that the association is not for profit making but simply to promote the interests of its members.
Dissolution of the association
This usually covers the following areas:
- When the association may be dissolved.
- The decision-making process and approvals for the dissolution.
- Effect of dissolution.
Amendment
It is common to include provisions on the circumstances, the process to be followed when a constitution is to be amended.
Registration of an association under section 82 of the Companies Act
An association may also be registered under section 82 of the Companies and Other Business Entities Act (Chapter 24:31) as a company without adding the word “limited”. In that case the key documents required will include:
- Memorandum and Articles of Association in place of the constitution.
- CR5 for registered address.
- CR6 for the directors and secretaries.
Conclusion
A constitution is a key document for the registration and administration of an association.
Disclaimer
This simplified article is for general information purposes only and does not constitute the writer’s professional advice.
Godknows (GK) Hofisi, LLB(UNISA), B.Acc(UZ), Hons B.Compt (UNISA), CA(Z), ACCA (Business Valuations) MBA(EBS, Heriot- Watt, UK) is the Managing Partner of Hofisi & Partners Commercial Attorneys, chartered accountant, insolvency practitioner, registered tax accountant and advises on deals and transactions. He has extensive experience from industry and commerce and is a former World Bank staffer in the Resource Management Unit. He writes in his personal capacity. He can be contacted on +263 772 246 900 or ghofisi@hofisilaw.com or gohofisi@gmail.com. Visit www//:hofisilaw.com for more articles.
