Winding up an association is where all outstanding affairs are finalised and a liquidator is appointed to manage the distribution of surplus assets.
Surplus assets are the assets that remain after all the association’s liabilities have been discharged and the costs and expenses of winding up have been paid.
An association can request an exemption to wind up by voluntary deregistration if they have surplus assets of $5,000 and above by emailing associations@sa.gov.au.
You can make an appointment with Consumer and Business Services (CBS) for assistance with the winding up process.
- Step 1
Declaring solvency
Before an association can pass a resolution to wind up, a majority of the committee members must make a declaration of solvency at a committee meeting. This records that majority of committee members believe the association can fully pay its debts within 12 months of winding up.
The minutes of the meeting must reflect that a majority of members made a declaration of solvency, and be signed by them (including the person who presided over the meeting).
The declaration must be lodged with CBS before the notice of meeting is sent to members to consider the resolution to wind up (see step 2 below).
To lodge the declaration of solvency, you will need:- minutes of the committee meeting at which the declaration was made
- a list of the assets (including their estimated realisable value) and liabilities.
- Step 2
Special resolution to wind up
After the declaration of solvency has been lodged, the association must pass a special resolution to wind up the association within 5 weeks of the date that the declaration of solvency was lodged with CBS. If you need more time, you can ask for an extension from CBS.
All members must have at least 21 days written notice of the meeting to vote on the special resolution to wind up. At the meeting, at least 75% of voting members must vote in favour of the resolution for it to pass.
At this meeting, ensure that an individual is authorised to make the application to wind up (please record this in the minutes of the meeting). - Step 3
Winding up
The association must appoint a liquidator for the winding up or ask CBS to approve a person who is not a registered company liquidator as the liquidator of the association.
The Australian Securities and Investments Commission (ASIC) registers liquidators. To find a liquidator, visit the ASIC Connect website.
Once the liquidator is appointed, they take full control of the association.The liquidator must lodge Form 505 with CBS to advise of their appointment.
At any point, if the liquidator thinks the association will be unable to pay their debts in full within 12 months, they must:- convene a meeting of the association’s creditors
- appoint an administrator or apply to the Supreme Court for the association to be wound up.
Once the liquidator finishes winding up the association, they must lodge a final return with CBS within one month. If members ask to be notified, the liquidator will advise them in writing of the lodgement.
CBS must cancel the registration within 3 months after the liquidator has lodged the return.
Contact CBS Associations and Cooperatives
Email: associations@sa.gov.au
Phone: 131 882, choose option 7
You can also book an appointment with the Associations Team for further assistance.
