What is a corporation rule book?
The rule book governs how your corporation should run—for example, how to elect directors and hold valid meetings. Having a rule book that is carefully followed and works well for a corporation is essential to maintaining good governance.
The rule book is your key corporate document, but there's a bit more to it than that. There is an order to the rules governing all Aboriginal and Torres Strait Islander corporations. All corporation rule books derive from the CATSI Act but they can also, in particular ways, overrule the CATSI Act.
The CATSI Act is the central, standard, default set of rules for a corporation. The corporation rule book includes everything specific to your corporation, and all the rules you have strengthened, replaced or raised to a higher standard than the law. Whenever you are in doubt about how things are supposed to work, reach for your rule book. It's only if something is not covered there that you'll need to consult the CATSI Act.
Where do the rules come from?
There could be 5 different kinds of rules in your corporation rule book—rules that:
- must be set by the corporation—e.g. the name, objectives, what makes people eligible for membership
- can be replaced, amended or adopted as is—they deal with a particular aspect of governance but how so is up to the corporation, e.g. ‘Members can appoint another member as their proxy to attend meetings and vote for them’
- can be changed—they deal with a particular aspect of governance and come with minimum standards, e.g. there's a default rule ‘Members must be at least 15 years old’ and a corporation may raise but not lower the minimum age
- are recommended by ORIC for good governance—e.g. that every year, half the directorships expire, to balance continuity and freshness
- are the corporation's own.
Note that if there is ever a conflict between a corporation's rule book and the CATSI Act, the legislation is paramount.
Using the rule book
Rules can sometimes be difficult to understand. In most circumstances very few people in a corporation will know all of the rules all of the time. It's important that a copy of the rule book is kept at the corporation's document access address/registered office. It is also a good idea to give each member of the corporation a copy of the rule book.
Most corporations set their rules when they first register. Over time things change, a corporations should update its rule book to deal with these changes.
Resources and further information
Fact sheet—What's in the corporation's rule book?
Below are some rule book tools that corporations can use to make their own rule book that complies with the CATSI Act and suits their needs.