Country Idealist Profiles

Recognized Organization Structures

During the non profit registration process, organisations must identify themselves as a company structure or incorporated association.

 

The Company Structure
Under a company structure, charitable or not-for-profit organisations will generally be registered as public companies that are limited by guarantee. Limited by guarantee means the liability of the company’s members is limited to the amount the members undertake to contribute to the property of the company if it is wound up.

 

Registration of a company creates a legal entity separate from its members. The company can hold property and can sue and be sued. Companies are registered under the Corporations Act 2001, which is Commonwealth legislation administered by ASIC. A company’s registration is recognised Australia wide. At the very least a public company must:

  • Have at least 3 directors and 1 secretary;

  • Have at least 1 member;

  • Have a registered office address and principal place of business located in Australia;

  • Have its registered office open and accessible to the public;

  • Be internally managed by a Constitution or Replaceable rules;

  • Maintain a register of its members;

  • Keep a record of all directors’ and members’ meeting minutes and resolutions;

  • Appoint a registered company auditor within 1 month of its registration;

  • Keep proper financial records

  • Prepare, have audited and lodge financial statements and reports at the end of every financial year;

  • Send to its members a copy of its financial statements and reports, unless the member has a standing arrangement with the company not to receive them;

  • Hold an Annual General Meeting once every calendar year within 5 months of the end of its financial year;

  • Receive and review an annual company statement and pay an annual review fee. A charitable or not-for-profit company may be eligible for a reduced annual review fee if it meets the criteria under the definition of ‘special purpose company’ in regulation 3(a), (b), (c) or (d) of the Corporations (Review Fees) Regulations 2003; and

  • Lodge notices whenever changes to its officeholders, office addresses, constitution and its name occur within specified timeframes as determined by the Corporations Act 2001. As a general guide please refer to “Legal obligations of a company” on our website at http://www.asic.gov.au/companies for more information.

A company limited by guarantee may also be registered without the word “Limited” in its name. This is only possible if its constitution:

  • requires the company to pursue charitable purposes only and to apply its income promoting those purposes

  • prohibits the company making distributions to its members and paying fees to its directors; and

  • requires the directors to approve all other payments the company makes to directors.

Incorporated Association
Associations are incorporated under State and Territory Associations Incorporation legislation, which is not administered by Australian Securities Investments Commission (ASIC), but by the various state authorities. An incorporated association is also a legal entity separate from its individual members that can hold property, sue and be sued. Incorporating an association in a State or Territory restricts the organisation to operating in its home jurisdiction. For example, an association incorporated under the Associations Incorporation Act of New South Wales may only carry on business in New South Wales.  The Associations Incorporation Acts provide a simple and more affordable means of creating a separate legal entity for small, community based groups with limited resources. The Associations Incorporation Acts impose less onerous conditions than the Corporations Act 2001 that governs the activities of companies.

 

As legislation differs in each state or territory, it is difficult to outline detailed requirements for incorporated associations, but basically an incorporated association may need to:

  • Have a committee, responsible for managing the association;

  • Have a public officer and notify any changes in that position;

  • Have a registered office in its state of incorporation;

  • Act in accordance with its objects and rules;

  • Hold an Annual General Meeting once every calendar year;

  • Lodge an Annual Statement every year;

  • Keep proper accounting records and, in some states prepare, have audited and lodge financial statements;

  • Keep minutes of all committee and general meetings.

  • Keep registers of members and all committee members

  • Have a common seal

Within the Northern Territory
To become incorporated, the objects or purposes of an association, society, institution or body must fall within the following:

  • a religious, educational, benevolent or charitable purpose;

  • the purpose of providing medical treatment or attention;

  • the purpose of promoting or encouraging literature, science, art or a cultural activity;

  • the purpose of recreation or amusement; or

  • the purpose of beautifying or improving a community centre

These objects and purposes must be carried on, in whole or in part, in the Northern Territory.

Source(s):
http://www.asic.gov.au/asic/asic.nsf/byheadline/Registering+not-for-profit+or+charitable+organisations?openDocument
http://www.nt.gov.au/justice/licenreg/documents/baal/ia02_inc_appn_0707.pdf

 

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