Articles about legal matters and non-profit organisations.
Navigating NFP Mergers: A Transfer of Business or Control
Mergers between not-for-profit (NFP) organisations are becoming increasingly common due to the current challenging economic and regulatory landscape. For some, it can provide an opportunity to better serve communities. For others, it’s the sole option for survival. Structuring a merger to suit the needs of the organisation is paramount. Merger implementation can have significant consequences for the entities involved, such as tax or funding implications. This article explores what a NFP merger is, the most common options to structure a merger and some tips and tricks to set your merger up for success.
Getting Basic Membership Rights Right
The existence of many member-based organisations relies on maintenance of the organisation’s good reputation. What is often overlooked is the need for such organisations to respect the reputation of their members.1 This case note stands as a reminder to committees to know their constitution and respect basic membership rights, especially when navigating a decision as critical as changing strategic direction. Summary In 2022, a case was heard in the Melbourne’s Magistrates Court by a claim under the oppressive conduct provisions of the Associations Incorporation Reform Act 2012 (Vic) (“AIR Act”).
Legal Obligations of NFP Directors
In this highly engaging presentation Sophie McNamara gives an overview of the various legal obligations NFP Directors have. Transcript of Legal Obligations of NFP Directors Sophie: I just want to say what a great event this has been. I’ve only been here for the afternoon, but I just want to congratulate Better Boards and Raf. It’s such a great idea. I gave a talk last year about managing difficult directors, and in my research for that found out that the average age of a director in Australia is 68 years old, and they are definitely a white man.
[Video] It’s not in the Tea Leaves, It’s in the Minutes
The humble Board Agenda and its progeny, the Minutes are often assigned to a spring back folder and buried on a shelf somewhere. There is little appreciation at board level of the marketing power of these documents. Brian examines the principles of a good agenda and minutes leaving attendees with new respect for the importance of these documents in painting an organisation, not just in retrospect, but in prospect.
Compliance and Creativity: the strategic obligations of directors
One of the main roles of a not-for-profit (NFP) board of directors is to develop and cultivate a long-term strategy for the organisation, which furthers the objects of that organisation.1 Despite the fact that directors appreciate that strategic planning forms part of their role on the board, directors often err on the side of caution when strategizing, or avoid developing a strategic vision for their organisation entirely. Reasons for this include:
Making Boards Fit for Purpose
Many successful organisations have not, until now, had to navel gaze – or change. Why worry if you can keep doing the same thing successfully, year after year? However, post Hayne and post Covid 19, the landscape has changed. “Good old boys drinking whisky and rye_“1 should no longer govern even the local cricket club. No organisation can ignore the requirements of corporate governance, risk management and the changed landscape – post Covid 19.
An NFP Dispute: a Tale of Two Hugs
Summary This story concerns a cultural group that formed a church in a Melbourne suburb to promote their faith. During 2019 an “us and them” culture developed with a new church committee adopting an authoritarian populist governance style. I do not make judgment about that style but mention it to set the scene. I acted for certain members (the “accused” members) who faced accusations from the committee and the committee’s associates.
Changing ATO Guidance For Sporting Club Income Tax Exempt Status
Taxation Ruling Income tax: exempt sporting clubs (“TR97/22”) is the formal public ruling issued by the Australian Taxation Office (“ATO”) on 3 December 1997 and applies “to sporting organisations seeking to determine whether they are exempt from income tax”. TR97/22 states it “is to assist a club’s office holders to determine whether their club is exempt from income tax”. A club which has a main purpose of sport (or sports) will be exempt from income tax pursuant to section 50-45 Item 9.
Fulfilling Your Obligations as a Not-for-profit Director
When Mark Edmonds joined his first not-for-profit (NFP) board he was surprised by what he found. “I’d attended board meetings as a senior executive and, because the role interested me, I’d also completed a company directors course,” says Edmonds, who is currently chairman of Barwon Community Legal Centre, deputy chair of the Geelong Chamber of Commerce and a director of the Geelong Cemeteries Trust. “I was very happy to be offered a place on a local statutory committee but, from my first meeting, I could see that these people either had limited ideas about their duties and responsibilities or were paying them scant attention.
Cybersecurity – Is This a New Directors’ Duty?
When not-for-profit organisations hear about cybersecurity issues and big data breaches in large international companies such as Facebook and Target, they often make the mistake of assuming that issues surrounding cybersecurity will not apply to them. The reality is that not-for-profits are very popular targets for cybersecurity attacks. This is because they often hold a ‘goldmine’ of sensitive information, while also being less equipped to protect themselves from these threats.