When establishing a non-profit organisation, founders can choose from a large range of legal forms. An organisation’s legal structure will determine the types of activities it is legally able to carry out and which government bodies it is required to seek registration from or report to. Incorporated associations are one possible structure of a non-profit organisation. Find out more about the other types of legal structures here.
An incorporation is a formal legal structure adopted by a large range of non-profit organisations in Australia. Incorporated associations are subject to state or territory incorporation laws and are administered to by a government body within the relevant state and territory. This also means that the operations of an incorporated association tend to be restricted to its home state. Consequently, this legal structure can restrict the growth of an organisation.
An incorporated association has an identity distinct from its founders and members and will continue to exist even if they leave the organisation. It can also be sued, legally lease a property, enter into contracts or hold assets in its name. Incorporation provides some protection for an organisation’s members and/or directors but it also carries additional legal and administrative obligations, such as, accounting, auditing and annual reporting requirements.
There are number of conditions that an organisation wishing to incorporate must meet. These will differ depending on the state/territory in which the organisation seeks to become incorporated, for example, in Victoria the minimum number of members for an incorporated association is five. Below is a list of some of the prerequisites to incorporation in the state of Queensland, according to the body responsible for incorporated associations, Fair Trading Queensland:
- “Be a non-profit association
- Have at least seven members
- Convene a general meeting and pass a motion to incorporate by resolution
- Choose an appropriate name
- Adopt a set of operating rules
- Elect a President, Secretary and Treasurer (two different people must hold the President and Treasurer positions)
- Lodge an Association Incorporation Form
- Pay the $133.50 fee
- Have an address in Queensland where the documents can be personally served.”
For more information on the conditions of incorporation and the government bodies that administer to Incorporated Associations in each state/territory, visit the relevant website below:
- Victoria — Consumer Affairs Victoria
- News South Wales — NSW Fair Trading
- South Australia — Consumer and Business Services
- Western Australia — Department of Commerce
- Queensland — Office of Fair Trading
- Tasmania — Office of Consumer Affairs and Fair Trading
- Australian Capital Territory Office of Regulatory Services
- Northern Territory Department of Business
This fact sheet is intended as a simple overview of non-profit legal forms and terminology. Non-profit law is incredibly complex and there will be many exceptions, restrictions, allowances and important qualifications that are not described above. This fact sheet is not intended and should not be taken as legal advice. In many cases, serious penalties apply to organisations that are found to be lax in fulfilling the requirements of their legal structure. Dedicated legal advice should be sought from a legal practitioner before taking action.