DIRECT SELLING

AUSTRALIA
 TABLE OF CONTENTS

1 PURPOSES AND NATURE OF THE COMPANY ............................................................. 1

1.1 Principal Purpose ................................................................................................ 1
1.2 Supporting Purposes ........................................................................................... 1
1.3 Company powers as a body corporate ................................................................ 1
1.4 Income applied for the Purpose ........................................................................... 1
1.5 Permitted payments to Members ......................................................................... 1
1.6 Winding up .......................................................................................................... 2

2 MEMBERSHIP .................................................................................................................. 2
2.1 Limited liability of Members / guarantee ............................................................... 2
2.2 Classes of Members and eligibility ....................................................................... 2
2.3 Eligibility requirements for all Members................................................................ 3
2.4 Provisional status ................................................................................................ 3
2.5 Member rights and obligations ............................................................................. 4
2.6 Rights not transferrable ....................................................................................... 4
2.7 Membership period, fees and levies .................................................................... 4
2.8 Professional Standards........................................................................................ 4
2.9 Representatives................................................................................................... 5
2.10 Register of Members, including closure of register .............................................. 5
2.11 Change of Member details ................................................................................... 5

3 BECOMING AND CEASING TO BE A MEMBER ............................................................. 5

3.1 Admission of Members ........................................................................................ 5
3.2 Resignation of Members ...................................................................................... 5
3.3 Ceasing to be a Member ..................................................................................... 6
3.4 Disciplining Members........................................................................................... 6
3.5 Effect of ceasing membership .............................................................................. 8
3.6 Recovery of fees or levies.................................................................................... 9

4 GENERAL MEETINGS ..................................................................................................... 9

4.1 Convening meetings — annual / special .............................................................. 9
4.2 Ordinary and special business ............................................................................. 9
4.3 Notice of meeting ................................................................................................. 9
4.4 Postponement ................................................................................................... 10
4.5 Quorum ............................................................................................................. 10
4.6 Meeting chair ..................................................................................................... 10
4.7 Adjournment ...................................................................................................... 11
4.8 Voting – show of hands / poll ............................................................................. 11
4.9 Proxies .............................................................................................................. 11
4.10 Direct voting....................................................................................................... 11
4.11 Use of technology .............................................................................................. 12
4.12 Circular resolution .............................................................................................. 12

5 BOARD ........................................................................................................................... 13
5.1 Structure of Board / Number of Directors ........................................................... 13
5.2 Election of Directors........................................................................................... 13
5.3 Appointment of Directors ................................................................................... 13
5.4 Eligibility to be a Director ................................................................................... 14
5.5 Limits on period of office as Director .................................................................. 14
5.6 Term of office of Directors.................................................................................. 14
5.7 Casual vacancies .............................................................................................. 14
5.8 Office bearers .................................................................................................... 15
5.9 Resignation of Directors .................................................................................... 15
5.10 Ceasing to be a Director .................................................................................... 15
 ii

5.11 Director remuneration and reimbursements ....................................................... 16

5.12 Transition........................................................................................................... 16

6 BOARD POWERS .......................................................................................................... 17

6.1 Management and control vests in Board ............................................................ 17
6.2 Power to delegate .............................................................................................. 17
6.3 Power to appoint Chief Executive Officer ........................................................... 17
6.4 Chief Executive Officer’s powers of investigation ............................................... 17
6.5 Power to appoint Secretary................................................................................ 18
6.6 Power to appoint Code Administrator ................................................................ 18
6.7 Power to make Regulations ............................................................................... 18

7 BOARD MEETINGS ....................................................................................................... 18

7.1 Number of meetings .......................................................................................... 18
7.2 Convening meetings .......................................................................................... 18
7.3 Notice of meeting ............................................................................................... 18
7.4 Quorum ............................................................................................................. 19
7.5 Meeting chair ..................................................................................................... 19
7.6 Voting ................................................................................................................ 19
7.7 Use of technology .............................................................................................. 19
7.8 Circulating resolutions ....................................................................................... 19
7.9 Conflicts and personal interests ......................................................................... 20
7.10 Minutes .............................................................................................................. 20
7.11 Validity of acts / procedural defects ................................................................... 20

8 COMMITTEES ................................................................................................................ 20
8.1 Board’s power to establish committees .............................................................. 20

9 ADMINISTRATION ......................................................................................................... 21
9.1 Change of name ................................................................................................ 21
9.2 Amendment of Constitution................................................................................ 21
9.3 Accounts............................................................................................................ 21
9.4 Audits ................................................................................................................ 21
9.5 Records and inspection ..................................................................................... 21
9.6 Service of notices .............................................................................................. 21
9.7 Indemnity of officers........................................................................................... 21
9.8 Insurance........................................................................................................... 22
9.9 Seal ................................................................................................................... 22
9.10 Definitions .......................................................................................................... 22
9.11 Interpretation rules ............................................................................................. 24
9.12 Application of Act ............................................................................................... 24
DIRECT SELLING AUSTRALIA LIMITED
(formerly Direct Selling Association of Australia Inc NSW Association INC9881009)

ABN 68 413 038 101

CONSTITUTION

1 PURPOSES AND NATURE OF THE COMPANY

1.1 Principal Purpose

The Principal Purpose of the Company is to:

(a) protect, promote and serve the interests of Members and the distributors of their Products;

(b) protect and promote the Direct Selling channel in Australian retailing, including through
self-regulation; and

(c) ensure the marketing of Products and Direct Selling opportunities by Members and their
distributors meet high levels of business ethics and customer protection and consumer
satisfaction.

1.2 Supporting Purposes

In support of the Principal Purpose, the Supporting Purposes of the Company are to:

(a) support self-regulation of the Direct Selling channel by:

(1) identifying non-Member activity or conduct which may have an adverse impact on the
Direct Selling channel; and

(2) taking appropriate steps to raise concerns regarding such activity or conduct; and

(b) do all lawful things consistent with, necessary or desirable to support and further the
Principal Purpose.

1.3 Company powers as a body corporate

Solely to carry out the Purpose, the Company has all the powers of an individual and a
company limited by guarantee under the Act.

1.4 Income applied for the Purpose

The Company’s income and property:

(a) must be applied solely towards the Purpose; and

(b) must not be paid or given to a Member, directly or indirectly, by way of dividend, bonus or
otherwise, unless permitted by clause 1.5.

1.5 Permitted payments to Members

The Company may pay a Member in good faith with prior Board approval up to a fair and
reasonable amount for:

(a) expenses properly incurred for the Company;

 Constitution 2

(b) goods or services supplied to the Company;

(c) interest on money lent to the Company; or

(d) rent for premises let to the Company.

1.6 Winding up

The Company’s surplus assets, after satisfying all liabilities on wind up or dissolution:

(a) must not be paid or given to Members or former Members; and

(b) must be paid to one or more funds, authorities or institutions which:

(1) have purposes similar to the Purposes;

(2) prohibit their income and property from being paid to members on at least the terms
of this clause 1; and

(3) are selected at or before wind up or dissolution:

(A) by Member special resolution;

(B) failing clause 1.6(b)(3)(A), by Board resolution;

(C) failing clause 1.6(b)(3)(B), by application to the New South Wales Supreme
Court.

2 MEMBERSHIP

2.1 Limited liability of Members / guarantee

(a) A Member’s liability is limited to the guaranteed amount in clause 2.1(b).

(b) If the Company is wound up, each Member and former Member in the previous year must
contribute up to one dollar ($1) towards:

(1) the Company’s liabilities contracted before the person ceased to be a Member; and

(2) costs, charges and expenses to wind up and adjust the rights of the contributories
among themselves.

2.2 Classes of Members and eligibility

The Company’s Members comprise the classes of Voting, Provisional and Non-voting
Members. The eligibility and rights are set out in the table below and such other non-voting
categories whose rights, benefits, privileges, entitlements, obligations, liabilities, eligibility and
status will be determined by the Board.

Class Eligibility Rights (see also clause 2.5)

Voting Member A Direct Selling Organisation (see also clause 2.3 and Voting
clause 2.4) Authorised Representative may
nominate for and be elected to the
Board of Directors.
Provisional A Direct Selling Organisation (see also clause 2.4) Non-voting
Member
 Constitution 3

Class Eligibility Rights (see also clause 2.5)

Non-voting Supplier Member: A person who conducts a business of Non-voting
Member supplying Products to Members.
Life Member: A natural person who has given outstanding Non-voting
service to Direct Selling and the Company, as determined
by the Board in its absolute discretion. Life Members will also be
conferred such additional rights
(other than voting rights) as are
determined by the Board.

2.3 Eligibility requirements for Members

In addition to the requirements set out in clause 2.2, a person is eligible to become and remain
(as the case may be) a Member if:

(a) the Board in its opinion considers that the person is a Fit and Proper person;

(b) the Board in its opinion considers that the Member and its representative will comply with
the requirements in this Constitution, the Code and any other policy, standard or condition
the Board may determine;

(c) the person undertakes to comply with, and actually complies with (as the case may be),
the requirements of this Constitution;

(d) the person undertakes to be bound by, and actually complies with (as the case may be),
the Code;

(e) the person undertakes to comply with, and actually complies with (as the case may be),
any policy, standard or condition the Board may determine;

(f) the person is not associated with other persons (whether or not a Member) who promote,
encourage or incites non-compliance with this Constitution, the Code or any policy,
standard or condition the Board may determine;

(g) where the person is a body corporate — the Board in its opinion considers that the
person’s representative is a Fit and Proper person and the person ensures that
clauses 2.3(b) to 2.3(e) are complied with by the representative as if he or she was a
Member.

2.4 Provisional Members

Upon admission as a Provisional Member under this Constitution, the provisional Member will
hold provisional status.

If the Member:

(a) has served with provisional status for at least 12 months;

(b) is not the subject of any outstanding disciplinary process under this Constitution (or
similar);

(c) is not the subject of any dispute or complaint (excluding a vexatious dispute or complaint)
which is the subject of active proceeding, investigation or other regulatory process which
may have an adverse impact on the Direct Selling channel; and

(d) remains a Fit and Proper person in the opinion of the Board,
 Constitution 4

then the Member may apply to the Board to become a Voting Member.

2.5 Member rights and obligations

(a) Voting Members have the right to receive notice of, participate in the requisition of, attend,
speak at, vote at and participate in a demand for a poll at general meetings if they have
paid all Member fees and levies.

(b) Voting Members have the right to nominate and elect Directors.

(c) Non-voting Members have the right to receive notice of and attend the annual general
meeting, but may not participate in the requisition of, speak at, vote at or participate in a
demand for a poll at a general meeting.

(d) As applicable, Members must comply with the requirements in this Constitution, the Code
and any other policy, standard or condition the Board may determine.

(e) Members must ensure that their representatives comply with the requirements in this
Constitution, the Code and any other policy, standard or condition the Board may
determine as if the representative was a Member.

2.6 Rights not transferrable

Membership rights and privileges:

(a) apply only whilst the person or organisation is a Member; and

(b) are personal and may not be transferred, assigned or transmitted.

2.7 Membership period, fees and levies

The Board may determine:

(a) the membership period (including common expiry dates) and the timing for membership
to be renewed;

(b) all fees payable by Members, including any annual subscriptions (provided they are
notified to Members before the commencement of each membership period) and
application fees to apply for membership;

(c) that, with an approval of a Voting Members’ ordinary resolution, a levy be imposed on
Members for a specified purpose according to such criteria as the Board may determine.

(d) whether all or any part of a Member’s fees should be waived or varied according to criteria
determined by the Board; and

(e) payment terms, including:

(1) whether fees are refundable or non-refundable; and

(2) how a levy is payable.

2.8 Professional Standards

(a) The Members may by special resolution approve and amend Codes of Practice.

(b) An order under the Code is enforceable by the Company against the Member.
 Constitution 5

2.9 Representatives

A Member which is a body corporate must appoint a representative in accordance with the Act.

2.10 Register of Members, including closure of register

(a) The Company must maintain a register of Members in accordance with the Act which
contains the following details for current and recent former Members:

(1) name of the Member (including the name of a representative);

(2) addresses for notices (including email);

(3) membership start and end dates; and

(4) any other particulars required by the Board.

(b) The Board may establish Regulations which regulate closure of the register for up to 60
days per year.

(c) Separate to the register, the Company may maintain a database of personal Member
details which are not used for notices.

2.11 Change of Member details

A Member must notify the Company within 28 days if any of the Member’s details change
(including a change in the representative).

3 BECOMING AND CEASING TO BE A MEMBER

3.1 Admission of Members

(a) The Board may admit in its absolute discretion a person or organisation as a Member
upon application by that person or organisation in accordance with any procedure, form
and other requirement specified in the Regulations.

(b) The Board must consider all membership applications within a reasonable time after their
receipt. The Company must provide written notice of the outcome of the application, but
need not provide reasons for admitting or refusing to admit a person or organisation as a
Member.

(c) Successful applicants become Members when they are added to the register of Members.

3.2 Resignation of Members

(a) A Member may resign as a Member by written notice to the Company.

(b) The resignation takes effect when the Company receives the Member’s notice or on a
later date specified in the notice.

(c) If at the time of resignation, a matter is being dealt with under this Constitution or the Code:

(1) the resignation does not take effect until the matter is concluded; and

(2) the Member must comply with the determination under this Constitution or the Code.

(d) The Board may reinstate membership if the person is otherwise eligible to be a Member
and reinstatement would occur within three months of the Member’s resignation.
 Constitution 6

3.3 Ceasing to be a Member

A person or organisation automatically ceases to be a Member if the person or organisation:

(a) ceases to be eligible to be a Member;

(b) ceases to be eligible for the relevant membership class;

(c) does not renew membership by the due date;

(d) has not paid Member fees or levies for 3 months after the due date;

(e) becomes untraceable for 3 months because the Member cannot be contacted using the
address on the register of Members;

(f) in the case of a natural person, dies, becomes of unsound mind or becomes a person
whose person or estate is liable to be dealt with in any way under the law relating to mental
health;

(g) becomes bankrupt or insolvent, or makes any arrangement or composition with the
Member’s creditors generally;

(h) is found guilty by a court of an indictable offence; or

(i) is a Provisional Member that does not progress to Voting Member within 24 months.

3.4 Disciplining Members

(a) (Sanctionable Conduct) In this clause 3.4(a), “Sanctionable Conduct” means conduct of
a Member or its representative which:

(1) is, has been or will be prejudicial to the Company or the Direct Selling channel;

(2) is not that of a Fit and Proper person;

(3) does not comply with a policy, standard or condition determined by the Board,
including, but not limited to, not complying with the obligation to pay Member fees,
levies or other money owed to the Company within a time allowed by the Board;

(4) is unbecoming of Members;

(5) adversely impacts the Direct Selling channel or adversely affects self-regulation of the
Direct Selling channel;

(6) constitutes a refusal or neglect to comply with the provisions of this Constitution, the
Code or the Regulations;

(7) is conduct for which the Member has been found guilty by a court of an indictable
offence; or

(8) is conduct similar to the above which is set out in the Regulations.

(b) (Initial investigation by CEO) The Chief Executive Officer may investigate a complaint
or concern regarding any Member on his or her own motion or on receipt of a complaint
from a consumer, Member or other interested party.

(c) (Recommendation by CEO to Board) If, following the investigation of any Direct Selling
Matter, the Chief Executive Officer forms the view that a Member has engaged in conduct
 Constitution 7

which a Tribunal may determine to be Sanctionable Conduct, the Chief Executive Officer
must either prepare:

(1) a formal disciplinary notice setting out the factual and legal basis on which the
Member is alleged to have engaged in conduct which a Tribunal may determine to be
Sanctionable Conduct (Disciplinary Notice); or

(2) an informal letter to the Member outlining issues of concern,

and the Chief Executive Officer must recommend whether the Board should proceed with
the further disciplinary steps set out below.

(d) (Board decision to initiate disciplinary process) The Board must consider the Chief
Executive Officer’s recommendation and must decide to either issue a Disciplinary Notice,
issue an informal letter, request further investigations or take no further action. If the Board
issues a Disciplinary Notice, then the Board must convene a disciplinary tribunal under
clause 3.4(e) (Tribunal).

(e) (Composition of Tribunal) The Tribunal must comprise either:

(1) the Code Administrator; or

(2) if the Code Administrator requests, a panel consisting of the Code Administrator, one
Direct Selling industry expert appointed by the Code Administrator and one consumer
representative appointed by the Code Administrator.

(f) (Tribunal practice and procedure)

(1) The Tribunal must convene expeditiously and seek to minimise delay in undertaking
this disciplinary process.

(2) The Tribunal may:

(A) make such order as appropriate in the circumstances; and

(B) refer any matter to another body for disciplinary action.

(3) The Tribunal must otherwise convene in accordance with any Regulations, and may
otherwise regulate the disciplinary process as it sees fit.

(4) Decisions of the Tribunal must be in writing and contain reasons for the decision.

(5) The Tribunal may impose an interim suspension of a Member pending the Tribunal
deciding whether to impose a final Sanction on a Member, but only if the Tribunal
considers in its opinion, or the Tribunal in good faith suspects:

(A) there is a serious issue warranting the interim suspension of the Member; and

(B) the balance of convenience favours the interim suspension of the Member (which
may include, without limitation, weighing harm to the Member against harm to the
public).

(g) (Disciplinary Hearing and Determination)

The Tribunal must:

(1) afford the Company and the Member procedural fairness and the right to be legally
represented;
 Constitution 8

(2) afford the Company and the Member a reasonable opportunity to present and make
submissions in relation to the Disciplinary Notice. The Tribunal may direct such
submissions to be orally or in writing;

(3) determine whether Sanctionable Conduct has occurred (Determination); and

(4) if Sanctionable Conduct is determined to have occurred, give the Company and the
Member a reasonable opportunity to present and make submissions in relation to
Sanctions. The Tribunal may direct such submissions to be orally or in writing.

(h) (Sanctions)

Subject to any rights of appeal, the Tribunal may Sanction a Member for Sanctionable
Conduct by ordering:

(1) a caution or reprimand be issued;

(2) a fine not exceeding $5,000.00;

(3) suspend a Member for a period not exceeding 12 months;

(4) terminate a Member’s membership of the Company.

(i) (Rights of appeal)

(1) The Company and the Member may appeal any Determination of the Tribunal to the
Supreme Court of New South Wales (or any other Court agreed by the parties), but
only on questions of law.

(2) Subject to clause 3.4(i)(1), the Company and each Member agrees that the Tribunal
shall have exclusive jurisdiction to hear and determine disciplinary proceedings
arising from a Disciplinary Notice, and that the decisions of the Tribunal bind the
Company and the relevant Members subject to the Disciplinary Notice.

(3) Clause 3.4(i)(2) does not prevent the Company or a Member from seeking urgent or
injunctive relief.

(j) (Confidentiality) The disciplinary process under this clause 3.4 and the decisions of the
Tribunal are confidential subject to any WFDSA policies or procedures under which the
Company is required to or has agreed to share any information relating to the Members
and the disciplining of Members with WFDSA or WFDSA’s members.

(k) (Enforcement of Tribunal decision)

(1) A Member suspended from membership has the obligations, but not the rights, of a
Member.

(2) A fine imposed under this clause 3.4 is recoverable as a debt due to the Company.

3.5 Effect of ceasing membership

If a person’s membership ceases then the former Member:

(a) must return to the Company as soon as practicable any property owned by the Company;
and

(b) must not represent that the person is a Member. If the former Member does not comply,
the Company may make public statements that the person is no longer a Member.
 Constitution 9

3.6 Recovery of fees or levies

If any action to recover money for Member fees or levies is required to be taken by the
Company:

(a) a Member appears on the Register as a Member in respect of whom the Member fee or
levy was fixed; and

(b) notice of the Member fee or levy was given to the Member,

this is conclusive evidence of a debt owed by the Member without it being necessary to prove
any other matter.

4 GENERAL MEETINGS

4.1 Convening meetings — annual / special

(a) General meetings other than annual general meetings are called special general
meetings.

(b) The Board must convene and hold annual and special general meetings of the Members
if required by the Act or if requested by not less than ten (10) voting Members in writing
and the request specifies the business to be transacted at the meeting.

(c) The Board may convene special general meetings of the Members.

4.2 Ordinary and special business

(a) The ordinary business of an annual general meeting is to:

(1) consider the Board, Chief Executive Officer, Code Administrator, financial and auditor
reports;

(2) declare the Director election results;

(3) appoint an auditor if that office has or will become vacant at the meeting; and

(4) consider any other matter required by the Act.

(b) Special business means:

(1) for an annual general meeting — business which is not ordinary business according
to clause 4.2(a); and

(2) for a special general meeting — all business specified in the notice of meeting,
including any amendment requested to the Code.

(c) The notice of meeting must specify the general nature of any special business, unless the
Act requires otherwise.

4.3 Notice of meeting

(a) At least 21 days’ notice of any general meeting must be given specifying the meeting’s
place, date and time, unless the Act requires or permits some other period of notice.

(b) Notice of every general meeting must be given in writing in accordance with clause 9.6 to:

(1) every Director;

 Constitution 10

(2) every Member entitled to attend who has supplied an address for notices to the
Company; and

(3) the Company’s auditor.

(c) No other person is entitled to receive notices of general meetings.

(d) A general meeting and any resolution passed at the meeting is not invalid merely because
of:

(1) the accidental omission to give notice of the meeting; or

(2) the non-receipt of any such notice.

4.4 Postponement

(a) The Board may postpone, relocate or cancel a general meeting which it convened by
giving at least 5 days’ notice to the Members.

(b) Clause 4.4(a) does not apply to a meeting requisitioned by Members or convened by the
Members, by individual Directors under clause 4.1(c) or by court order.

4.5 Quorum

(a) A general meeting may not transact business unless a quorum is present when the
meeting proceeds to business.

(b) The quorum for general meetings is ten (10) voting Members present in person or by
proxy.

(c) If a quorum is not present within 30 minutes of the time scheduled to start the general
meeting:

(1) the meeting, if requisitioned by Members, is dissolved; and

(2) in any other case, the meeting is adjourned to such other place, date and time as the
Board determines and notifies to Members (if required to do so by clause 4.7).

(d) If a quorum is not present within 30 minutes of the time scheduled to start the adjourned
general meeting, the meeting is dissolved.

4.6 Meeting chair

(a) The Chairperson may chair a general meeting.

(b) If the Chairperson is not present and willing to act the Vice Chairperson may chair.

(c) If the Chairperson and Vice Chairperson are not present and willing to act:

(1) the Directors present may choose one of their number to chair the meeting;

(2) if no Director is present, or if all the Directors present decline to chair, the Members
present must choose one of their number to chair.

(d) In addition to powers conferred by law, the meeting chair may:

(1) determine the meeting’s conduct and procedures to ensure proper and orderly
discussion or debate;
 Constitution 11

(2) make rulings without putting a question to the vote, or terminate discussion or debate
and require that matter to be put to a vote;

(3) refuse to allow debate or discussion on any matter which is not ordinary or special
business; and

(4) refuse any person admission to a general meeting (including for causing offence or
disruption), or expel the person from the general meeting and not permit them to
return.

(e) All procedural decisions by the meeting chair are final.

4.7 Adjournment

(a) The meeting chair:

(1) may, with the consent of any general meeting at which a quorum is present; and

(2) must, if so directed by the meeting,

adjourn the meeting to some other time or place.

(b) The adjourned meeting may only transact unfinished business from the original meeting.

(c) If a meeting is adjourned for 30 days or more, notice of the adjourned meeting must be
given as required for the original meeting. It is not otherwise necessary to give any notice
of an adjournment or of the business to be transacted at an adjourned meeting.

4.8 Voting – show of hands / poll

(a) By default, resolutions at general meetings must be voted on by a show of hands.

(b) The meeting chair has a second or casting vote.

(c) The meeting chair must declare whether resolutions were carried, carried unanimously,
carried by particular majority or lost. These voting results must be minuted.

(d) The minutes of the voting results are conclusive without the need to record the number or
proportion of, or manner in which votes were cast.

(e) A poll may be demanded by the meeting chair or at least five voting Members present in
person and entitled to vote.

(f) A demand for a poll must be made on or before the result being declared, and may be
withdrawn.

(g) A poll to elect a meeting chair or adjourn the meeting must be taken immediately. Polls
must otherwise be taken at that meeting in the manner directed by the meeting chair.

(h) The meeting chair must decide all voting disputes, and that decision is final.

4.9 Direct voting

The Board may determine that at any general meeting of the Company, a Voting Member is
entitled to a direct vote in respect of a resolution to be voted on at that meeting.
 Constitution 12

If the Board determines that votes may be cast by direct vote, the Board may specify the form,
method and manner of casting a direct vote and the time by which a direct vote must be
received by the Company in order for the vote to be valid.

4.10 Proxies

(a) A voting Member may appoint a proxy to act on the Member’s behalf at any general
meeting at which that Member may attend and vote.

(b) A proxy need not be a Member.

(c) For the instrument appointing a proxy to be valid, it must be:

(1) in writing and signed by the appointor;

(2) in the form complying with the Act or some other Board approved form; and

(3) lodged with the Chief Executive Officer at least 48 hours before the time for holding
the meeting or adjourned meeting.

(d) A vote given according to the proxy instrument is valid despite:

(1) the death, or unsoundness of mind, of the appointor; or

(2) revocation of the instrument or of the authority under which the instrument was
executed,

if no knowledge in writing of that fact was received by the Company before

commencing the meeting or adjourned meeting at which the instrument is used.

4.11 Use of technology

General meetings may be held at more than one place, provided that the technology that is
used enables each Member present at all places the meeting is held to clearly and
simultaneously communicate with every other such Member.

4.12 Circular resolution

(a) The Board may, if it thinks fit, submit any question or resolution to the vote of all Members
entitled to a vote at a general meeting by circular resolution, unless the Act requires a
special or ordinary resolution to be passed at a general meeting.

(b) The Board may determine in the Regulations:

(1) the form of the circular resolution;

(2) the polling date;

(3) the method for responding to the circular resolution; and

(4) whether voting on the circular resolution is to be by secret ballot.

 Constitution 13

5 BOARD

5.1 Structure of Board / Number of Directors

The Board will comprise between 3 and 10 Directors as follows:

(a) between 3 and 9 Directors elected by and from the Voting Members, through their
representatives, in accordance with clause 5.2; and

(b) up to 1 Director appointed by the Board in accordance with clause 5.3.

5.2 Election of Directors

(a) Nominations of candidates for election as a Director must be signed by the candidate,
contain a consent to act as a Director signed by the candidate, and must be received at
least 14 days before the annual general meeting.

(b) If the number of nominations of candidates for election does not exceed the number of
vacancies, those candidates will be declared elected at the annual general meeting.

(c) If the number of nominations of candidates exceeds the number of vacancies, balloting
lists must be printed containing candidate names in alphabetical order and sent to each
Member at least 10 days before the annual general meeting.

(d) The ballot should be counted prior to the annual general meeting in accordance with the
process set out in the Regulations.

(e) The returning officer appointed by the Board must declare the election result at the annual
general meeting.

5.3 Appointment of Directors

(a) Subject to this Constitution, the Board must determine any other procedures or matters in
relation to the selection process to appoint an Appointed Director and may make
Regulations for that purpose.

(b) Unless the Board resolves otherwise, the Secretary:

(1) is responsible for the conduct of the selection process of an Appointed Director; and

(2) may decide all matters in relation to the conduct of the selection process, subject to
this Constitution and the Regulations.

(c) The Regulations pursuant to clause 5.3(a) must be consistent with the following:

(1) Before each annual general meeting, the Secretary must publicly call for Appointed
Director candidates who are Members.

(2) The Secretary must convene a committee for the purpose of conducting the selection
process.

(3) The committee may, but is not required to, interview all candidates for becoming an
Appointed Director.

(4) The committee must recommend candidates to be appointed as an Appointed

Director on the basis of their skills, background and expertise deemed necessary or
desirable by the Board (including, without limitation, to complement the Elected
Directors) for the effective operation of the Board.
 Constitution 14

(5) At the Board meeting preceding each annual general meeting, the Board may appoint
an Appointed Director after considering the recommendations from the committee
conducting the selection process.

(6) The meeting chair must announce the appointment of an Appointed Director at the
annual general meeting. Appointments take effect at the end of the annual general
meeting at which the appointments are announced.

5.4 Eligibility to be a Director

A person is eligible to become a Director if he or she:

(a) in the case of Elected Directors — is a Voting Member or a representative of a Voting

Member;

(b) is over the age of 18 years;

(c) consents in writing to become a Director;

(d) is not prohibited or disqualified or otherwise prevented from being a director of a company
under the Act; and

(e) is not an employee of the Company.

5.5 Limits on period of office as Director

(a) Subject to clause 5.5(b), if a person has served nine years (between annual general
meetings) or more in the preceding ten year period (between annual general meetings) as
Director, the Director does not become eligible to be elected as a Director again until he
or she has not been Director for a subsequent continuous period of two years between
annual general meetings.

(b) The Voting Members in a general meeting may pass an ordinary resolution permitting a
person or class of persons to serve a longer period than specified under clause 5.5(a).

5.6 Term of office of Directors

(a) An Elected Director holds office:

(1) from immediately after the annual general meeting at which his or her election was
declared;

(2) for a term of three years between annual general meetings;

(3) until the end of the third annual general meeting after the one at which his or her
election was declared.

(b) An Appointed Director holds office from the date of appointment until the end of the third
annual general meeting after the date of appointment.

(c) The Board may appoint an Appointed Director for a shorter term than under clause 5.6(b)
if the Board so determines at the time of appointment.

5.7 Casual vacancies

(a) If a casual vacancy occurs for any Elected Director office, the Board may appoint another
eligible person in his or her place until the end of the next annual general meeting. The
Members must then elect a person to fill the Elected Director in accordance with
 Constitution 15

clause 5.2. The person elected will serve only for the balance of the term of the original
Elected Director.

(b) If a casual vacancy occurs for any Appointed Director office, the Board may appoint
another eligible person in his or her place until the end of the next annual general meeting.

(c) The Board may continue to act despite vacancies on the Board. However, if there are
less than three (3) Directors, the Board may only:

(1) act in the case of emergencies;

(2) appoint persons to fill casual vacancies; or

(3) convene a general meeting.

5.8 Office bearers

(a) The Board may elect and remove the following office bearers from the Directors to hold
the office bearer position for a period of up to three years (between annual general
meetings) as determined by the Board:

(1) Chairperson, subject to the Director elected being eligible under clause 5.8(b);

(2) Vice Chairperson; and

(3) such other office bearer positions determined by the Board.

(b) A person may serve no more than six years (between annual general meetings) as
Chairperson, unless the Voting Members in general meeting pass an ordinary resolution
permitting a longer period as Chairperson.

5.9 Resignation of Directors

(a) A Director may resign as Director by written notice to the Company.

(b) The resignation takes effect when the Company receives the Director’s notice or on a later
date specified in the notice.

5.10 Ceasing to be a Director

(a) The Members may remove any Director in accordance with the Act.

(b) A directorship automatically ceases if the Director:

(1) dies or is physically incapable of fulfilling his or her duties as a Director;

(2) in the case of an Elected Director — ceases to be an Voting Member or a

representative of a Voting Member;

(3) becomes disqualified from being a director pursuant to the Act;

(4) for more than three (3) months is absent without Board permission from Board
meetings held during that period;

(5) is convicted of an offence involving fraud or dishonesty;

(6) becomes a bankrupt or makes any arrangement or composition with personal

creditors generally; or
 Constitution 16

(7) becomes of unsound mind or a person whose person or estate is liable to be dealt
with in any way under the law relating to mental health.

5.11 Director remuneration and reimbursements

The Directors are not entitled to any fees or remuneration for undertaking the ordinary duties
of a Director.

Despite clause 1.4:

(a) the Directors are entitled to any payment approved by the Board for Products supplied to
the Company in the ordinary course of business;

(b) the Directors may be reimbursed for reasonable travel and other expenses incurred by
them when engaged in the Company’s business, attending meetings or otherwise in
carrying out the duties of a Director where payment does not exceed any amount
previously approved by the Board; and

(c) the Directors may be paid for any service rendered to the Company in a professional or
technical capacity outside the scope of the Director’s ordinary duties where:

(1) the service and amount payable is on reasonable and proper terms; and

(2) the provision of that service has the Board’s prior approval.

5.12 Transition

Despite anything to the contrary in this Constitution, upon registration of Direct Selling
Association of Australia Inc NSW Association No INC9881009 (Association) as a company
under this Constitution:

(a) the Chairperson under the Association’s rules becomes the Chairperson under this
Constitution and shall hold office until the end of the 2020 Annual General Meeting;

(b) the Vice Chairperson under the Association’s rules becomes the Vice Chairperson under
this Constitution;

(c) all other Directors become Elected Directors under this Constitution;

(d) at the 2020 Annual General Meeting, to replace Elected Directors retiring at the 2020
Annual General Meeting:

(1) three Directors shall be elected in accordance with clause 5.2 for a term of three years
and will retire at the end of the 2023 Annual General Meeting;

(2) three Directors shall be elected in accordance with clause 5.2 for a term of two years
and will retire at the end of the 2022 Annual General Meeting; and

(3) three Directors shall be elected in accordance with clause 5.2 for a term of one year
and will retire at the end of the 2021 Annual General Meeting;

(e) for the purposes of clause 5.5 and 5.8(b), a person’s service as a Director before 1 July
2017 is to be disregarded.
 Constitution 17

6 BOARD POWERS

6.1 Management and control vests in Board

(a) The Board is responsible for the governance, business and affairs of the Company. In
addition to the specific powers conferred on the Board by this Constitution, the Board may
exercise all the Company’s powers which are not by the Act or this Constitution required
to be exercised by the Members in general meeting. The Board may exercise functions
that it considers necessary or desirable to give effect to the Constitution.

(b) The powers under clause 6.1(a) are subject to:

(1) this Constitution;

(2) the Act; and

(3) such resolution, not being inconsistent with those provisions, as may be passed by
the Members in general meeting.

(c) The Board must, prior to the commencement of a financial year, approve a business plan
and budget for that financial year.

(d) A resolution under clause 6.1(b) does not invalidate any prior act of the Board which would
have been valid before the resolution was passed or made.

6.2 Power to delegate

(a) The Board may delegate its powers and functions, but not its power of delegation, in
writing to:

(1) an officer or employee of the Company; or

(2) a committee under clause 8.

(b) The Board may amend or revoke the terms of its delegation at any time.

6.3 Power to appoint Chief Executive Officer

(a) The Board may appoint a Chief Executive Officer on such terms and conditions as the
Board determines from time to time.

(b) The Board may remove a Chief Executive Officer, subject to the terms of any agreement
between the Company and the Chief Executive Officer.

(c) The Chief Executive Officer is entitled to attend Board meetings and general meetings, if
so directed by the Board, from time to time.

(d) The Chief Executive Officer will have the responsibilities determined by the Board.

6.4 Chief Executive Officer’s powers of investigation

In addition to any powers conferred under clause 6.3, the Chief Executive Officer has the
power to:

(a) investigate any Direct Selling Matter, regardless of whether any complaint has been
received by the Company from a consumer, Member or other interested party, and
regardless of whether the person investigated is a Member; and
 Constitution 18

(b) delegate his or her powers of investigation.

6.5 Power to appoint Secretary

(a) The Board must appoint at least one Secretary on such terms and conditions as the Board
determines from time to time.

(b) A Secretary may attend Board meetings and general meetings, if so directed by the Board,
from time to time.

(c) The Board may appoint the Chief Executive Officer to be the Secretary, but it is not
mandatory for the Board to do so.

(d) The Secretary is able to delegate its powers and functions with the written approval of the
Board.

(e) The Board may amend or revoke the terms of the Secretary’s delegation at any time.

(f) The Secretary will have the responsibilities set out in the Act.

6.6 Power to appoint Code Administrator

The Board must, on terms it approves, appoint a person to act as the Code Administrator for
the purposes of the Code.

6.7 Power to make Regulations

(a) The Board may from time to time make, vary and rescind Regulations in relation to the
Company.

(b) The Regulations for the time being in force, and which are not inconsistent with this
Constitution, are binding on Members and have full effect accordingly.

7 BOARD MEETINGS

Subject to this clause 7, the Board may meet to consider business, adjourn and otherwise
regulate its meetings as it thinks fit.

7.1 Number of meetings

The Board may meet to despatch the business as they deem fit.

7.2 Convening meetings

The Secretary must arrange a Board meeting:

(a) at the request of the Chair; or

(b) on the requisition of two (2) or more Directors.

7.3 Notice of meeting

(a) At least seven (7) days’ notice of any Board meeting must be given unless the Board
decides otherwise or in emergencies.

(b) The notice must specify the business to be transacted. The Board may only transact
business of a routine nature unless notice of any other business has been given either in
 Constitution 19

the notice convening the meeting or in some other notice given at least three (3) days
before the meeting.

(c) The decision of the meeting chair as to whether business is routine is conclusive.

7.4 Quorum

(a) The quorum for a Board meeting is a simple majority of the Directors entitled to attend and
vote. A meeting at which a quorum is present may exercise all powers and discretions of
the Board.

(b) If a Board meeting is adjourned due to lack of quorum, the Board can reconvene when it
sees fit.

7.5 Meeting chair

(a) The Chair may chair a Board meeting.

(b) If the Chair is absent the Vice Chairperson may chair.

(c) In the absence of the Chair and the Vice Chairperson, the Directors may appoint a meeting
chair from among their number.

7.6 Voting

(a) Each Director present and entitled to vote at a Board meeting has one vote. Proxy voting
and alternate Directors are not permitted.

(b) Questions arising at a Board meeting must be decided by a majority of votes. Such a
decision is for all purposes a decision of the Board.

(c) In the event of an equality of votes the meeting chair has a second or casting vote.

7.7 Use of technology

The Board may hold a technology enabled meeting if:

(a) all Directors (other than any Director on leave of absence) have access to the technology
to be used for the meeting; and

(b) those Directors participating by technological means can hear, or can hear and read the
communications of all other participating Directors.

7.8 Circulating resolutions

(a) A written resolution signed or approved by the lesser of 7 or all the Directors by
technological means (other than any Director on leave of absence) is taken to be a
decision of the Board passed at a Board meeting convened and held.

(b) The written resolution may consist of:

(1) several documents in the same form, each signed by one or more Directors and, such
a resolution takes effect when the last Director of the required number of Directors
signs such a document; or

(2) permanent records indicating the identity of each Director, the text of the resolution
and the Director’s agreement or disagreement to the resolution, as the case may be,
 Constitution 20

and such a resolution takes effect when the last Director of the required number of
Directors indicates his or her approval.

7.9 Conflicts and personal interests

(a) A Director who has a material personal interest in a matter that relates to the Company’s
affairs must give the other Directors written notice of the interest unless section 191(2) of
the Act require otherwise.

(b) A Director who has a material personal interest in a matter that is being considered by the
Board must not be present while the matter is being considered, or vote on the matter,
unless permitted to do so under section 195 of the Act.

(c) The nature of the conflict and its resolution must be recorded in the minutes of the meeting.

7.10 Minutes

(a) The Board must ensure that minutes of all proceedings of general, Board, committee
meetings (and meetings of any other Board entity) are recorded in a minute book within
one month after the relevant meeting is held.

(b) The minutes must be signed by the meeting chair at which the proceedings took place or
by the meeting chair of the next succeeding meeting.

(c) Minutes entered and signed are prima facie evidence of the proceedings to which they
relate.

(d) A Director may require a vote or abstention to be recorded in the minutes.

7.11 Validity of acts / procedural defects

(a) A Board act or decision will not be invalid by reason only of a defect or irregularity in
connection with the election or appointment of a Director.

(b) For entered and signed minutes, unless the contrary is proved:

(1) the meeting is deemed to have been convened and held;

(2) all proceedings that are recorded in the minutes as having taken place are deemed
to have taken place; and

(3) all appointments that are recorded in the minutes as having been made are deemed
to have been validly made.

8 COMMITTEES

8.1 Board’s power to establish committees

The Board may establish committees as follows:

(a) a committee will comprise two or more committee members, of which at least one must
be a Director;

(b) the committee members otherwise need not be a Director or Member;

(c) the committee has the purpose set out in its charter approved by the Board, and may
undertake the powers and functions delegated to it by the Board; and
 Constitution 21

(d) in the absence of any provision in the committee charter, meetings and proceedings of
any committee are governed by the provisions of clause 7.

9 ADMINISTRATION

9.1 Change of name

The Members may change the Company’s name by special resolution in accordance with the
Act. Such a resolution authorises the Board to update all references to the Company’s name
in this Constitution.

9.2 Amendment of Constitution

The Members may amend this Constitution by special resolution in accordance with the Act.

9.3 Accounts

The Board must cause:

(a) proper accounting and other records to be kept in accordance with the requirements of
the Act, and

(b) financial statements to be made and laid before each annual general meeting as required
by the Act.

9.4 Audits

A properly qualified auditor must be appointed and the auditor’s duties regulated in accordance
with the requirements of the Act.

9.5 Records and inspection

A Member (other than a Director) is not entitled to inspect any document of the Company,
except as provided by law or authorised by the Board.

9.6 Service of notices

(a) Notices must be in writing and may be given by the Company to any Member:

(1) in person;

(2) by sending it by post to the Member at the Member’s registered address; or

(3) by sending it to the address, facsimile number, e-mail address or other address
supplied for receiving notices.

(b) A notice sent by post is deemed to have been given 6 business days after it was posted.
A notice sent by fax, or by other electronic means, is deemed to have been given on the
next business day after it was sent.

9.7 Indemnity of officers

(a) To the Relevant Extent, the Company indemnifies current and former Officers out of its
assets against any Liability incurred by the Officer in or arising out of:

(1) the conduct of the Company’s affairs or business; or

 Constitution 22

(2) the discharge of the Officer’s duties, unless the Liability arises out of conduct involving
a lack of good faith.

(b) To the Relevant Extent, the Company may execute any deed in favour of any current or
former Officer to confirm the indemnities conferred by clause 9.7(a) in relation to that
person to the extent the law does not preclude the Company from doing so.

(c) Clause 9.7(a) applies whether or not any deed is executed under clause 9.7(b).

(d) In this clause 9.7 and clause 9.8:

(1) Liability includes cost, charge, loss, damage, expense or penalty; and

(2) To the Relevant Extent means to the extent the Company is not precluded from
doing so by law (including the Act).

9.8 Insurance

To the Relevant Extent:

(a) the Company may pay or agree to pay premiums for directors’ and officers’ insurance to
insure current or former Officers against any Liability incurred by the Officer in or arising
out of:

(1) the conduct of the Company’s affairs or business; or

(2) the discharge of the Officer’s duties; and

(b) the Company may execute any deed in favour of any current or former Officer to take out
insurance referred to in clause 9.8(a), on such terms as the Board considers appropriate.

9.9 Seal

(a) The Board will determine whether or not the Company is to have a seal (known as the
common seal) and, if so, will provide for the safe custody of such seal.

(b) The seal, if any, of the Company may only be affixed to any instrument with the Board’s
authority.

(c) The affixing of the seal must be attested by the signatures of persons authorised by the
Board for that purpose.

9.10 Definitions

In this Constitution:

Act means the Corporations Act 2001 (Cth);

Appointed Director means a Director appointed for the purposes of clause 5.1(b);

Board means the board of Directors of the Company with a quorum to transact business;

Chairperson means the Director and office bearer under clause 5.8(a)(1);

Chief Executive Officer means the person appointed under clause 6.3;

Code means the Code of Practice approved under clause 2.8;

 Constitution 23

Code Administrator means the person appointed under clause 6.6, or where the context
requires, his or her nominee or alternate when unable to act, including due to any conflict of
interest;

Company means the company named on the top of page 3 of this Constitution;

Constitution means this constitution of the Company;

Direct Selling means the supply of a Product that arises or emanates from an agreement
negotiated between an Independent Sales Person and a consumer away from a fixed retail
location;

Direct Selling Business means the supply of Products by Direct Selling, but does not include
the activity of an Independent Sales Person;

Direct Selling Matter means any matter, issue, incident or occurrence involving a Direct Seller
Organisation or a Direct Selling Business which adversely impacts the Direct Selling channel
or adversely affects self-regulation of the Direct Selling channel, regardless of whether any
complaint has been received by the Company from a consumer, Member or other interested
party, and regardless of whether the person investigated is a Member.

Direct Selling Organisation means a company, partnership or other body (whether or not
incorporated) which conducts a Direct Selling Business;

Director means a person for the time being who performs the role of director of the Company;

Elected Director means a Director elected for the purposes of clause 5.1(a);

Fit and Proper means fit and proper, of good fame and character, and otherwise of good
standing;

Independent Sales Person means a natural person engaged by a Direct Selling Organisation
to sell, and recruit persons to sell its Products;

Member means a person who is a member of the Company pursuant to clauses 2 and 3;

Non-voting Member means a person who is a member of the Company without voting rights
pursuant to clauses 2 and 3;

Officer has the meaning given in the Act;

Principal Purpose means the principal purposes set out in in clause 1.1;

Product includes goods and services;

Provisional Member means a person who is a newly admitted member of the Company
pursuant to clause 2.4;

Purposes means the Principal Purpose and the Supporting Purposes;

Regulations means regulations made by the Board under clause 6.6;

Sanction means a sanction set out in clause 3.4(h);

Secretary means a secretary appointed under clause 6.4;

Supporting Purposes means the supporting purposes set out in clause 1.2;
 Constitution 24

Vice Chairperson means the Director and office bearer under clause 5.8(a)(2);

Voting Member means a person who is a member of the Company with voting rights pursuant
to clauses 2 and 3;

WFDSA means the World Federation of Direct Selling Associations.

9.11 Interpretation rules

Unless the contrary intention appears in this Constitution:

(a) words importing the singular include the plural, and words importing the plural include the
singular;

(b) words importing a gender include every other gender;

(c) words used to denote persons generally or importing a natural person include any
company, corporation, body corporate or other body (whether or not the body is
incorporated);

(d) a reference to any statute, regulation, proclamation, ordinance or by-law includes all
statutes, regulations, proclamations, ordinances or by-laws varying, consolidating or
replacing them and a reference to a statute includes all regulations, proclamations,
ordinances and by-laws issued under that statute;

(e) where a word or phrase is given a particular meaning, other parts of speech and
grammatical forms of that word or phrase have corresponding meanings;

(f) headings and bold text are for convenience only and do not affect its interpretation; and

(g) a Member is to be taken to be present at a general meeting if the Member is present in

person or by proxy or attorney.

9.12 Application of Act

(a) This Constitution is to be interpreted subject to the Act. However, the rules that apply as
replaceable rules to companies under the Act do not apply to the Company.

(b) Unless the contrary intention appears, a word or expression in a clause that is defined in
section 9 of the Act has the same meaning in this Constitution as in that section.
Direct Selling Australia Limited ACN 637660274
A Public Company Limited by Guarantee under the Corporations Act 2001 (Cth)
Level 23, 45 Clarence Street. Sydney NSW 2000
P. 02 9138 0636 E.askus@directselling.org.au W. www.directselling.org.au