Country Idealist Profiles

Australia – Non Profit general characteristics

Posted in Australia, Australia General Third Sector, Australia Third Sector by blopote on August 15, 2008

A non-profit organization is one which is not operating for the profit or gain of its individual members, whether these gains would have been direct or indirect. This applies both while the organization is operating and when it winds up.

Any profit made by the organization goes back into the operation of the organization to carry out its purposes and is not distributed to any of its members.

Organizations’ will be non-profit where their constituent or governing documents prevent them from distributing profits or assets for the benefit of particular persons, both while they are operating and on winding up. These documents should contain acceptable clauses to indicate non-profit character. The organization’s actions must be consistent with this requirement:

A non-profit organization can still make a profit, but this profit must be used to carry out its purposes and must not be distributed to owners, members or other private people.

Acceptable clauses indicating non-profit character Various forms of words can be used to show non-profit character in an organization’s constituent or governing documents.The following are examples:
Non-profit clause: The assets and income of the organization shall be applied solely in furtherance of its above-mentioned objects and no portion shall be distributed directly or indirectly to the members of the association except as bona fide compensation for services rendered or expenses incurred on behalf of the organization.

Dissolution clause: In the event of the organization being dissolved, the amount that remains after such dissolution and the satisfaction of all debts and liabilities shall be transferred to any organization with similar purposes which is not carried on for the profit or gain of its individual members.


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