CET New Constitution - Background.
1. Background Summary.
Our constitution is way over ten years old and while it was an excellent one it drastically needs to be updated to fall in line with requirements by the Department of Social Development, Tax laws, the Auditor as well as to be more acceptable to ECSA.
2. Some Important Issues of the current Constitution.
2.1 In 2003 already the Chamber was required to register with the Department of Social Development in order to be classed as a Non Profit Organisation and thus to be exempted from Tax.
Our application was unsuccessful as they ruled our constitution as inadequate with a large number of shortcomings.
Amongst these and this is not all of them they RULED that;
2.1.1 No provision for organizations income and property not to be distributable to members except for reasonable compensation for services rendered etc.
2.1.2 No provision for the organizations continued existence notwithstanding changes in composition of members or office bearers.
2.1.3 It does not make provision to ensure members or office bearers have no rights in assets etc.
2.1.4 It does not determine the date of the financial year.
2.1.5 It does not adequately provide for wind up or dissolution in that assets after expenses must be transferred to another non profit organisation with similar objectives.
2.1.6 Insufficient number of members submitted.
With regard to the above and other issues they RULED and their decisions stand even though we pointed out our interpretation of our constitution differed to theirs. They RULED and their is no appeal.
They did however suggest the wording in a few of the clauses.
They still expect us to reply by re-applying.
2.2 Cutting a long story short the SA Revenue Services (SARS) also had similar objections to COET being a non taxed entity but after a number of discussions and letters etc our Auditor Mr. M P McIntyre managed to get a letter from the Tax Exemption Unit that COET is temporally exempt form Tax receipts or accruals as well as donations. All this is subject to certain conditions such as submission of annual audited financial statement etc. The exemption is temporary and subject to review.
2.3 ECSA recognition of COET as a recognised Voluntary Association is in place. At the screening committee meeting they commented on the length and complexity of the constitution. I was present and could explain the points raised successfully.
2.4 Our constitution needs to be similar and not in conflict to any organisation that joins us or affiliates to us. The current constitution appears to address too many aspects and yet misses some items that have become issues in recent years. It is necessary to streamline and simplify the constitution by putting in only what is regarded as essential and leave all the nice to haves rules as details in the Bye Laws.
2.5 As to legal actions there may be an opportunity for some other person / organisation to take COET apart with the existing constitution.
3. Work in Progress.
3.1 The Constitution was studied to try to include changes suggested. This proved to be a huge logistics problem as much of the constitution is so detailed and complex that it is not possible to easily accomplish this. It is virtually impossible to change so many clauses, delete others and include new ones besides the cross-referencing. The entire structure will be destroyed if this change is followed. The constitution is some 13 pages long without the introduction part, which is also a few pages in length.
3.2 On some advice received a new constitution, which includes the important items from the old constitution, as well as addressing the shortcomings, has been drawn up. This is 6 pages long (less than half the length of the existing one). It is somewhat streamlined and simplified and removes some items, which are to be covered in Bye Laws. By Laws can be decided on and updated by the Council which is much quicker than the cumbersome process of getting approval from all members at an AGM or Special General Meeting. Council has, of course, to report any changes of By Laws to members and members can challenge and overturn any By Laws at the AGM or a Special General Meeting if they so wish.
4. The Process Forward.
4.1 The attached revised new draft constitution has been approved by Council at its January 2009 meeting and is circulated to members for perusal and comment. All comments have to be in writing and sent to our office timeously.
4.2 The new constitution is to be tabled and approved at the AGM in March 2009. See the Notice for the AGM on this website.
