Body Corporate: Legal Definition and Types

A body corporate is any entity that has been legally incorporated. Incorporation gives the entity a legal identity separate from its members or owners. It can hold property, enter into contracts, sue and be sued, and continue to exist regardless of changes in its membership.

The term appears throughout Australian legislation, most prominently in the Corporations Act 2001. Section 57A defines “corporation” to include any body corporate, whether incorporated in Australia or elsewhere. The definition excludes corporation sole and exempt public authorities.

In everyday Australian usage, “body corporate” often refers to the entity that manages a strata or community titles scheme — an apartment building, townhouse complex, or similar shared property. That usage is correct but narrow. The legal meaning is much broader. For the strata-specific meaning, see Body Corporate (Strata and Community Titles).

How bodies corporate are created

Bodies corporate come into existence through different legal mechanisms. Australian courts and tribunals have described three main ways this happens:

By charter, prescription, or long usage. The corporation sole (a single office-holder, such as a bishop holding church property in their official capacity) and the corporation aggregate (a group of persons incorporated by royal charter) are historical forms that still exist in limited circumstances. Both can also be created by statute. Note that the Corporations Act explicitly excludes a corporation sole from its definition of “corporation” under s 57A(2), so these entities are not regulated under that Act.

By statute. Parliament creates specific bodies corporate through legislation. ASIC, the Reserve Bank, and the ABC are all statutory corporations. Each is established by its own Act and has the powers that Act confers.

By registration under a statute. This is the most common route. When an organisation registers under the Corporations Act, the Associations Incorporation Act of a state or territory, the Corporations (Aboriginal and Torres Strait Islander) Act 2006, or similar legislation, registration creates the body corporate. Companies, incorporated associations, cooperatives, building societies, credit unions, and trade unions are all created this way.

Key legal characteristics

A body corporate has separate legal personality. It is a legal person in its own right, distinct from the people who make up its membership. Members can join, leave, or be replaced without affecting the entity’s legal status or identity.

A body corporate also has perpetual succession. It continues to exist until it is formally wound up or deregistered. The death, resignation, or removal of individual members does not end the entity.

Because it is a separate legal person, a body corporate can own property in its own name, enter into contracts, and incur debts. It can sue and be sued directly, rather than requiring individual members to take or defend legal proceedings on its behalf.

In most cases, members have limited liability. They are not personally responsible for the debts of the body corporate beyond any unpaid amounts on their shares or membership fees. This separation of liability is one of the principal reasons organisations choose to incorporate. However, limited liability protects members in their capacity as members — directors can still face personal liability under the Corporations Act for insolvent trading (s 588G) or under the ATO’s director penalty regime for unpaid PAYG withholding and superannuation guarantee charges.

Types of bodies corporate in Australia

The following are all bodies corporate, though they are governed by different legislation and have different structures:

Companies. Proprietary companies (Pty Ltd), public companies (Ltd), and companies limited by guarantee are all bodies corporate registered under the Corporations Act 2001 with ASIC. See Company Structures (Australia) for detail on the differences.

Incorporated associations. Community organisations, sporting clubs, and smaller not-for-profits typically incorporate under state or territory legislation. Once incorporated, the association is a body corporate. See Incorporated Association for more.

Statutory corporations. Government-created entities such as the ABC, Australia Post, and state water authorities. Each operates under its enabling legislation.

Indigenous corporations. Registered under the CATSI Act and regulated by the Office of the Registrar of Indigenous Corporations (ORIC). See Prescribed Bodies Corporate.

Owners corporations (strata bodies corporate). Created under state strata or community titles legislation to manage common property in developments with multiple lots or units. This is the meaning most Australians associate with the term “body corporate”. See Body Corporate (Strata and Community Titles) for a full explanation.

Related bodies corporate

The Corporations Act uses the term “related bodies corporate” to describe the relationship between companies in a corporate group. Under section 50 of the Act, two bodies corporate are related if one is a holding company of the other, one is a subsidiary of the other, or both are subsidiaries of the same holding company.

This matters for governance because the Act imposes certain obligations and restrictions based on related-entity relationships — for example, disclosure requirements for transactions between related bodies corporate.

Why the distinction matters for governance

The type of body corporate determines which legislation applies, what the reporting obligations are, and what duties the directors or committee members owe. A director of a company limited by guarantee has duties under the Corporations Act. A committee member of an incorporated association has duties under the relevant state legislation. A lot owner in a strata scheme has rights and obligations under the applicable strata or community titles Act.

Getting the structure right at the outset avoids problems later. For guidance on choosing the right structure, see Company Structures (Australia).

Related Terms

Governance

Company Structures (Australia)

Board of Directors

Accountability

Additional Resources

Corporations Act 2001 (Cth)

ACNC Charity Structure Guide

Legal Obligations of NFP Directors

Prescribed Bodies Corporate Fact Sheet