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Why cancel or wind up?
An incorporated association may choose to cancel or wind up for a number of reasons, such as:
- lack of members
- loss of interest
- fulfilment of its purposes.
Cancelling or winding up will help ensure an association’s assets are distributed lawfully.
Unless Consumer Affairs Victoria cancels its incorporation, an association remains legally in existence even after it stops operating.
An association can only apply for cancellation if it:
- has gross assets of less than $10,000
- has no outstanding debts or liabilities
- has paid all relevant fees and penalties
- is not involved in any legal proceedings.
An application for voluntary cancellation can be made with us by:
- an incorporated association that has passed a special resolution seeking cancellation
- a member or former member (if the association is no longer operating)
- a statutory manager appointed under the Associations Incorporation Reform Act 2012
- an administrator of the association (if the association is under voluntary administration).
The association must then lodge with us:
- an Application for cancellation of incorporation (Word, 124KB) confirming the above information
- any outstanding annual statements and the lodgement fee for each
- a copy of the full set of meeting minutes (if a special resolution was passed relating to the distribution of assets)
- proof of distribution of assets.
Voluntary winding up
If an association has assets of more than $10,000, it must wind up in accordance with the Commonwealth Corporations Act 2001.
The members of an association can initiate the winding up. The process involves:
- passing a special resolution to approve the association being wound up
- appointing a liquidator to manage the liquidation of the association's assets
- ceasing or selling its operations
- payment of its debts (if any), and
- distribution of surplus assets (if any).
An association can choose to wind up even if it has assets less than $10,000, but it must appoint a liquidator. If it chooses to cancel its incorporation, it does not have to appoint a liquidator.
Appointing a liquidator
An association must appoint a registered liquidator to manage the distribution of assets. The Australian Securities and Investments Commission (ASIC) registers liquidators. To find a liquidator, visit the ASIC Connect website.
The liquidator must lodge the following forms with us; all of these forms are available on the ASIC website:
When to lodge the form:
Form 520 - Declaration of solvency
Before notice of the meeting where the special resolution to propose winding up is sent out.
Resolution must be passed within five weeks of making the declaration of solvency.
Form 205 - Notification of resolution
Within seven days after passing the resolution.
Must contain or attach a printed copy of the resolution.
Form 505 - Notification of appointment or cessation of an external administrator
Within 14 days after appointment.
Use the same form to tell us when a liquidator has ceased.
Form 524 - Presentation of accounts and statements
Within one month after the first six months of the liquidator’s appointment, and every six months after that.
Form 523 - Notification of final meeting convened by liquidator
Within seven days after final meeting.
Liquidator must include copy of the account showing how winding up was conducted.
Generally, an association cannot distribute surplus to its members. The only exceptions to this include:
- associations with rules approved before 8 April 2009 that allow such distribution
- special circumstances detailed in the Associations Incorporation Reform Act 2012.
Two or more incorporated associations wishing to amalgamate and form one incorporated association must take the following steps:
- Each association must pass a special resolution and approve the:
- terms of the amalgamation
- rules and statement of purposes of the proposed amalgamated association.
- If the associations wish to amalgamate into one legal entity, the nominated secretary of the new association must lodge with us an Application to amalgamate incorporated associations (Word, 369KB).
- This must be accompanied by a 'Notice of special resolution approving amalgamation of incorporated associations', completed by the secretary of each amalgamating association. This notice is contained in the Application to amalgamate incorporated associations form.
- All documents must be lodged in one envelope with the relevant fee. All cheques must be made payable to Consumer Affairs Victoria. We will only issue receipts on request.
Note: if your amalgamating association has not submitted recent annual statements, we may ask them to complete these before we approve the amalgamation.
After accepting an application for amalgamation, we will:
- issue a certificate of incorporation for the amalgamated association
- cancel the incorporation of the individual associations.
- any property belonging to the individual associations becomes the property of the amalgamated association
- any debts or liabilities of the individual associations become the debts and liabilities of the amalgamated association.