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One of the major legal decisions your group faces is whether to incorporate.
This is an important decision – your group needs to balance the benefits of incorporation against the obligations required of incorporated groups.
Key factors that will help you decide whether to be an incorporated or unincorporated not-for-profit include:
The following pages will consider these factors in greater detail and help you to decide whether incorporation is likely to be the best option for your group. You may also wish to seek legal advice to help you with this decision.
Everyone starts out small but there are turning points when you grow or your activities change which can mean it is time to rethink your group's status. If your activities significantly change, for example your group gets larger, you employee someone, or you start applying for grants, we encourage you to revisit these questions.
An auspicing arrangement is where an incorporated organisation agrees to have a project carried out ‘under its auspices’. This means that you can conduct a particular activity without needing to incorporate your group. This arrangement might suit projects like a pilot program, a one-off event (such as a fair or exhibition), or a youth-focused project. It may also suit a new group to be incubated as a start-up. Being auspiced doesn’t prevent you from incorporating later on. There are some tricks and traps for both the group wanting to be auspiced and the group being asked to auspice another group so take a look at our free resources.
Your group will need to consider whether it is important to have ‘separate legal identity.’
Incorporation involves registering your group with the government and adopting a formal structure. Your group will then have a 'separate legal identity' and the group can:
Being able to put things in the separate name of the group is useful if your group plans to do any of the following:
Plan for success! If you think your group will do any of the above things, put plans in place for the groups you wish to become rather than the group you are now.
To attract or be eligible for certain types of funding, you may need to be incorporated.
Some funders require a group to be incorporated – check the requirements of any grants your group might want to apply for. Also, some tax concessions are only available to not-for-profit groups that are incorporated - eg. Deductible Gift Recipient status. For more information see our DGR Guide.
Your group also needs to consider whether it's important to have protection from personal liability.
Incorporation is one way to protect the people involved from personal liability. In an incorporated group, generally the entity itself is liable for any compensation, debts, legal costs or money owed. The legal term for this is ‘limited liability’. In an unincorporated group the individual members or committee members might be personally liable. Practically speaking, this may mean that if something goes wrong with your unincorporated group each individual involved must contribute their own money to help pay for any costs.
If your group conducts the following activities, you might need protection from personal liability:
Groups might not need protection from personal liability if they are conducting lower-risk activities, like a social lunch group.
Apart from incorporating, other ways that you might be able to protect against personal liability include taking out insurance or entering an auspicing arrangement. As mentioned before, getting insurance as an unincorporated group can be trickier because the group can’t enter into an insurance contract in its own name.
There are some exceptions to the protection!
An officeholder (such as a director or committee member) of an incorporated group may not be protected from personal liability if they breach their legal duties. More information can be found in our factsheet ‘What is ‘incorporation’ and does our group need to incorporate?’.
Based on your answers, your group may wish to incorporate. However, your group also needs to consider whether the benefits to incorporation outweigh the ongoing obligations of incorporated groups.
The main benefits and obligations of incorporation are summarised below:
Benefits
Obligations
If you choose yes, this tool will go into greater detail on the obligations of incorporated groups.
In your responses you indicated that your group requires separate legal identity or protection from personal liability. Your group may still want to consider incorporating.
You have also indicated that the benefits of incorporation do not outweigh the ongoing obligations for your group, so your group may want to stay unincorporated.
You may wish to seek legal advice to help you with this decision.
In the meantime, you may find it helpful to learn more about the obligations of being incorporated by clicking ‘tell me more about incorporation’ below.
Based on the answers provided, incorporation may suit your group.
Incorporation involves arranging the organisation into a formal legal structure and registering the entity with government.
Click 'Next' to find out more about legal structure.
There may be no reason why your group should incorporate just yet. This is a decision you need to review if your activities change or increase in scope in the future (for example your group gets larger, you employee someone, or you start applying for grants).
Based on your answers, it seems there is no key reason why you should incorporate now, but you should review this decision if your activities change or increase in scope in the future.
If your group chooses to stay unincorporated, your group will not be recognised as a ‘separate legal entity’ and will not have benefits such as general protection from personal liability.
Some benefits of not incorporating are:
Unincorporated groups can still carry on day-to-day activities like an incorporated group. Your group can still have a formal set of operating rules (a constitution), hold meetings, and issue statements about its financial dealings. It can also take out insurance to try to protect it from possible liability (although insurance may be more difficult or more expensive to get when unincorporated). Unincorporated groups will still have legal obligations, such as to complying with employment law, health and safety laws, consumer law, tax laws and a range of other laws.
Remember there is still a vast difference between unincorporated and incorporated groups.
While incorporated and unincorporated groups may look the same from the outside, in the eyes of the law there is a vast difference, and if something goes wrong, the courts will treat the two organisations very differently (discussed at the end of this tool).
If remaining unincorporated sounds like the right option for your group click ‘Next’.
If you wish to review or amend your responses, click ‘Previous’.
You have told us that your group may want to incorporate. The next decision you need to make is which incorporated legal structure will best suit the aims, activities and culture of your group. Choosing the right incorporated structure is an important legal decision.
The legal structure your group chooses will influence:
This part of the tool will show you the different legal structures and help you work out which legal structure is best for your group.
This tool focuses on four not-for-profit legal structures:
While our questions may lead you to information about the ‘co-operative’ or ‘Indigenous corporation’ legal structures, the most common legal structures (by far) for not-for-profit groups are the ‘incorporated association’ and the ‘company limited by guarantee’ structures.
We will now guide you through a series of questions designed to help your group make a decision on the most suitable legal structure.
Each question in this tool requires a response. If you are unsure, read the additional resources we provide for more information and respond on the basis of what you want your group to become (rather than what it is now). Remember, you can always re-visit your responses.
Question A: Where will your group operate?
Some legal structures are better suited to groups that have a local focus. Other legal structures are better suited to groups which have a multi-state or national focus. For more information, see our fact sheets on legal structure.
Plan for success! If you think your group may operate in multiple states and territories in the future, we recommend planning for this possibility from the start. It can be complicated if you change your mind later.
Question B: How many members will your group have?
Some legal structures are only suitable for groups that will have a certain number of members. For example, some legal structures require at least 5 members, some at least 7 members and others only require 1 member. For more information, see our fact sheet on members and our fact sheet on legal structure.
Remember, these are the minimum number of members. Your group can have many more than 1, 5 or 7 members.
Question C: Will your group be an Aboriginal and Torres Strait Islander organisation?
Indigenous groups (that is, groups where majority of directors (board members) and members of the group are Aboriginal and Torres Strait Islander people) have the option of adopting a tailored legal structure. For more information, see our fact sheet on Indigenous corporations.
Question D: Will your group operate as a co-operative?
Groups that wish to be ‘member focused’ and operate according to a special set of legal 'co-operative principles' have the option of adopting a special legal structure. For more information, see our fact sheet on co-operatives.
The co-operative legal structure is not suitable for every group and should be treated with caution. There are aspects of the co-operative legal structure that are complicated, resource intensive and heavily regulated.
Your group doesn’t need to be a co-operative to be member focussed or operate according to a special set of principles. Your group can be an incorporated association or a company limited by guarantee and also be member focused and operate according to a set of self-crafted principles (sometimes referred to as ‘purpose’ or ‘aims and objects’).
Question E: What resources will your group have?
Some legal structures have more complex or stricter reporting requirements or membership structures and are not suitable for groups with limited resources (people, time and money). For more information, see our fact sheets on legal structure.
Based on your responses you may be interested in incorporating as a company limited by guarantee (CLG).
There are however have some factors to consider and be cautious of before adopting this legal structure. These are contained in the ‘Caution’ box below.
If your group intends to register as a charity with the ACNC, there are benefits to choosing this legal structure. The next part of this tool looks at whether your group is eligible to register as a charity.
Your answers indicate that your group intends to operate in multiple states or territories or intends to have a national focus. A CLG is a common legal structure for groups operating across multiple states or territories because it is a nationally regulated legal structure. This means that a CLG can be active anywhere in Australia.
The government body responsible for regulating the incorporation and operation of CLGs is the Australian Securities and Investments Commission (ASIC).
If your group incorporates as a CLG and registers as a charity with the Australian Charities and Not-for-profits Commission (ACNC), your main regulator will become the ACNC. Remember, the next part of this tool looks at whether your group is eligible to register as a charity.
An important feature of a CLG is that its members have limited liability. The members agree in writing to contribute a nominal amount (known as a ‘guarantee’ and usually $10 – $100) to the assets of the company in case the company is wound up and is unable to pay its debts and other liabilities. If the company is wound up, the liability of a member is limited to the nominal amount that the member has guaranteed.
Just like a 'business' company, a CLG has ‘directors’, but unlike a business, it has ‘members’ instead of ‘shareholders’. Some of the provisions of the Corporations Act 2001 (Cth) (Corporations Act) (eg. directors’ duties and penalties) that apply to shareholder companies also apply to CLGs.
A CLG is a type of incorporated legal structure that may be suitable for some not-for-profit groups.
Your answers indicate that your group has, or intends to have sufficient resources (people, time and money). This is important because running a CLG can require more resources, or be more 'resource intensive', than some other legal structures (such as an incorporated association). This is because there are a higher fees, penalties and a more complex regulatory regime for CLGs.
If you plan to operate in multiple states or territories, and your group is unsure whether to establish an incorporated association or a CLG, note that the process of registering and operating an incorporated association in other states and territories can be as resource intensive as registering and operating a CLG.
If your group incorporates as a CLG and registers as a charity with the ACNC, different and less complex laws will apply to your organisation. This is because, when a CLG becomes registered as a charity, most Corporations Act requirements ‘switch off.’ For more information see our guide to running a charitable CLG
We recommend you review our resources on 'choosing a legal structure' for more information about the resources (people, time and money) involved in setting up and running a CLG.
Your answers indicate that your group is likely to have limited resources (people, time and money). This is an important consideration because running a CLG can require more resources, or be more resource intensive, than some other legal structures (such as an incorporated association). This is because there are a higher fees, penalties and a more complex regulatory regime for CLGs. If you plan to operate in multiple states or territories, and your group is unsure whether to establish an incorporated association or a CLG, note that the process of registering and operating an incorporated association in multiple states and territories can be just as resource intensive as registering and operating a CLG.
If your group incorporates as a CLG and registers as a charity with the ACNC, different and less complex laws will apply to your organisation. This is because, when a CLG becomes registered as a charity, some Corporations Act requirements ‘switch off.’ For more information see our guide to running a charitable CLG.
If your group has limited resources and does not register as a charity we strongly suggest that you consider an alternative legal structure. We recommend you review our resources on choosing a legal structure for more information about the resources involved in setting up and running a CLG.
Your answers indicate that your group has, or is likely to have, at least 5-7 members. If your response to this question changes before you choose a legal structure, you may be interested to know that a CLG only requires 1 member (while other legal structures require more).
It is important to note that 1 member is the minimum requirement for a CLG, so your group is not restricted to 1 member and can have more than 1 member. The requirement to have a minimum of 1 member may benefit a group that wants to retain a higher degree of control or, an organisation that will be a subsidiary of another organisation. But, remember a CLG must still have at least 3 directors.
Your answers indicate that your group does not have, and is unlikely to have 5-7 members. If your response to this question changes before you choose a legal structure, you may be interested to know that a CLG only requires 1 member (while other legal structures require more).
It is important to note that 1 member is the minimum requirement for a CLG, so your group is not restricted to 1 member and can have more than 1 member. The requirement to have a minimum of 1 member may benefit a group that wants to retain a higher degree of control or, an organisation that will be a subsidiary of another organisation. But, remember a CLG must still have at least 3 directors
Your answers indicate that your group is likely to only have 1 member. If your response to this question changes before you choose a legal structure, you may be interested to know that a CLG only requires 1 member (while other legal structures require more).
Examples of groups that may want to consider this structure:
Examples of groups who may not benefit from this structure:
If a company limited by guarantee sounds like the right legal structure for your group click ‘Next’ and then select company limited by guarantee.
If your group is still unsure click ‘Next’.
If you wish to review or amend your responses, click ‘Review your answers to the preliminary questions’.
Review your answers to the preliminary questions
If your group is unsure, or you would like to learn more about other legal structures, click on the below options.
These options are based on the responses you have provided. If you wish to review or amend your responses, click ‘Review your answers to the preliminary questions’.
Return to original recommendation: Co-operativeReview your answers to the preliminary questions
Return to original recommendation: Indigenous CorporationAlternative option: Co-operative Review your answers to the preliminary questions
Based on your responses you may be interested in incorporating as an incorporated association.
This is a common legal structure for not-for profit groups operating in one state or territory.
Incorporated associations were introduced to provide a simple and inexpensive way to incorporate not-for-profit groups.
All states and territories have their own, slightly different, laws to set up incorporated associations. Each state and territory also has a different government department responsible for regulating incorporated associations.
For more information, see our fact sheets on incorporated associations.
Your answers indicate that your group intends to have a local focus, or focus on a specific state or territory. An incorporated association is designed for locally focused not-for-profit community groups that want to operate within a single state or territory
It can be complicated and resource intensive to incorporate as an ‘incorporated association’ and later decide to operate in more than one state or territory. Plan for success! If you think your group may operate in multiple states and territories in future, consider incorporating as a company limited by guarantee, especially if your group intends to register as a charity with the ACNC.
Your answers indicate that your group is likely to reach 5-7 members. This is important because the majority of incorporated associations are required to have a minimum number of members (mostly ranging between 5-7 members). If you can't reach the minimum number of members in your state or territory, you may need to consider another legal structure.
The minimum number of members required for each state and territory are:
Your answers indicate that your group does not have, and is unlikely to reach 5-7 members. This is important because the majority of incorporated associations are required to have a minimum number of members (mostly ranging between 5-7 members). If you can't reach the minimum number of members in your state or territory, you may need to consider another legal structure.
Your answers indicate that your group is likely to only have 1 member. This is important because the majority of incorporated associations are required to have a minimum number of members (mostly ranging between 5-7 members). If you can't reach the minimum number of members in your state or territory, you may need to consider another legal structure.
Your answers indicate that your group has, or intends to have sufficient resources (people, time and money).
You may be interested to know that incorporated associations were introduced to provide a simple and inexpensive way to incorporate not-for-profit groups.
Your answers indicate that your group is likely to have limited resources (people, time and money). This sounds like a good fit for your organisation, because incorporated associations were introduced to provide a simple and inexpensive way to incorporate not-for-profit groups.
Examples of groups that may want to consider this structure include:
Plan for success! If you think your group may operate in multiple states and territories in future, consider incorporating as a company limited by guarantee, especially if your group intends to register as a charity with the ACNC.
If an incorporated association sounds like the right legal structure for your group click ‘Next’ and then select incorporated association.
If your group is still unsure, click ‘Next’.
Return to original recommendation: Co-operative Review your answers to the preliminary questions
Based on your responses your organisation may wish to register with the Office of Indigenous Corporations (ORIC) and become an Indigenous corporation. This is because you indicated that your group is an Aboriginal and Torres Strait Islander group, and would be interested in registering with ORIC.
After reading through the information below, you might not think that this is the right legal structure for your group. Don’t worry - at the bottom of this page you will have an opportunity to learn more about other legal structures.
The Indigenous corporation structure is designed to meet the needs of Aboriginal and Torres Strait Islander groups, and takes Indigenous customs and traditions into account.
ORIC is the government body responsible for supporting and regulating Indigenous corporations.
Aboriginal and Torres Strait Islander groups can choose to apply to be registered as an Indigenous corporation with ORIC. However, it might not be the most suitable legal structure for Aboriginal and Torres Strait Islander groups (there are some exceptions), and Aboriginal and Torres Strait Islander groups are free to choose another more suitable structure (like an incorporated association, company limited by guarantee, co-operative etc).
See below for alternative legal structures if your group decides that it does not wish to register as an Indigenous corporation with ORIC.
The structure of an Indigenous corporation is somewhat similar to a company limited by guarantee (another type of legal structure), although there are additional features such as the requirement for a proportion of the corporation’s members and directors to be Aboriginal and Torres Strait Islander persons.
ORIC, the main regulator, also has some additional powers to those of ASIC (the body that regulates companies limited by guarantee). These additional powers include the ability to call meetings of members and appoint special administrators.
Not all Indigenous corporations are not-for-profit. Only Indigenous corporations that are structured so that the profits are put back into the corporation are suitable for not-for-profit groups.
Your answers indicate that your group intends to operate in multiple states or territories or intends to have a national focus. Indigenous corporations can operate (carry on activities) anywhere in Australia.
Your answers indicate that your group intends to have a local focus, or focus on a specific state or territory. Indigenous corporations can operate (carry on activities) anywhere in Australia.
Your answers indicate that your group has, or is likely to have at least 5 members. This is important because Indigenous corporations are required to have at least 5 members (unless approved by the Registrar).
Your answers indicate that your group does not have, and is unlikely to have 5 members. This is important because Indigenous corporations are required to have at least 5 members (unless approved by the Registrar). If you do not believe that your group will have at least 5 members we recommend that you seek legal advice before adopting this legal structure or that you speak to ORIC.
Your answers indicate that your group is likely to only have 1 member. This is important because Indigenous corporations are required to have at least 5 members (unless approved by the Registrar). If you do not believe that your group will have at least 5 members we recommend that you seek legal advice before adopting this legal structure or that you speak to ORIC.
Your answers indicate that your group does not have, and is unlikely to have 5 members. This is important because Indigenous corporations are required to have at least 5 members (unless approved by the Registrar). If you do not believe that your group will have at least 5 members we recommend that you seek legal advice before adopting this legal structure. We also have a recommendation for an alternative legal structure known as a ‘CLG’ which only requires 1 member.
Your answers indicate that your group has, or intends to have sufficient resources (people, time and money). You may be interested to know that it is free to register with ORIC as an Indigenous corporation (unlike for other legal structures such as incorporated associations and companies limited by guarantee) and that sometimes (especially if it is small) an Indigenous corporation may be exempted from producing annual reports.
Your answers indicate that your group is likely to have limited resources (people, time and money). You may be interested to know that it is free to register with ORIC as an Indigenous corporation (unlike for other legal structures such as incorporated associations and companies limited by guarantee) and that sometimes (especially if it is small) an Indigenous corporation may be exempted from producing annual reports.
See ORIC’s website and our fact sheet Indigenous corporations for further details on the key features of Indigenous corporations.
Only Aboriginal and Torres Strait Islander organisations can incorporate using this structure. This means that the majority of the members and directors of the organisation must be Aboriginal or Torres Strait Islander, and an organisation that wants to be not-for-profit must have a ‘rule book’ which prevents surpluses or profits being distributed to members.
Some examples of groups that may want to consider this structure:
Examples of a group who may not benefit from this structure:
If an Indigenous corporation sounds like the right legal structure for your group click ‘Next’ and then select Indigenous corporation.
If your group is unsure, or you would like to learn more about other legal structures, click on the options below.
If an Indigenous corporation sounds like the right legal structure for your group click 'Next’ and then select Indigenous corporation.
Based on your responses you may be interested in the option of incorporating as a co-operative. This is because you indicated that you wish to operate according to a special set of principles, the 'co-operative principles' and that your group is 'member focused'.
Ther are however have some factors for your group to strongly consider and be cautious of before adopting this legal structure. These are contained in the ‘Caution’ box below. The co-operative legal structure is not suitable for every group and should be treated with caution. There are aspects of the co-operative legal structure that are complicated, resource intensive and heavily regulated.
Your group doesn’t need to be a co-operative to be member focused or operate according to a special set of principles. Your group can be an incorporated association or a company limited by guarantee and also be member focused and operate according to a set of self-crafted principles (sometimes referred to as ‘purpose’ or ‘aims and objects’.)
After reading through the information below, you may not think that this is the right legal structure for your group. Don’t worry - at the bottom of this page you will have an opportunity to learn more about other legal structures.
A co-operative is a group that forms to benefit its own members (rather than the broader community) through its activities, and is owned and controlled by its members. For example, its purpose may be to provide particular goods or services to its own members, or to pursue community-based objectives that will benefit all its members equally.
The co-operative structure is based on certain co-operative values, including self-help, self-responsibility, democracy, equality, equity and solidarity.
Not all co-operatives are not-for-profit. There are both distributive and non-distributive co-operative structures. Only a co-operative which has rules to prevent surpluses or profits from being distributed to members is suitable as a not-for-profit structure. For more information, see our fact sheet co-operatives.
Your answers indicate that your group intends to have a local focus, or focus on a specific state or territory.
Although the Co-operatives National Law (CNL) exists, co-operatives are registered and regulated by different regulators in each state and territory.
We strongly encourage you to consider the information below before deciding if the co-operative legal structure is suitable for you.
Only organisations that want to apply the co-operative principles to their organisation can register as a co-operative. The Co-operatives Registrar under the CNL can only register groups that are 'designed to function under the co-operative principles'.
The co-operative legal structure will not suit all groups. Effective co-operatives require all members to be actively involved, which may cause problems throughout the co-operative's existence.
Certain groups should be cautious about adopting a co-operative structure, such as:
However, those wanting to set up community owned services or projects, such as a food cooperative, may suit this legal structure.
Your answers indicate that your group has, or is likely to have at least 5 members. This is great because co-operatives are generally required to have at least 5 members (unless you are a ‘co-operative group’ or a different number of members is approved by the Registrar).
Your answers indicate that your group does not have, and is unlikely to have 5 members. Co-operatives are generally required to have at least 5 members (unless you are a ‘co-operative group’ or a different number of members is approved by the Registrar). If you do not believe that your group will have at least 5 members we recommend that you seek legal advice or speak to the regulator in your state or territory before adopting this legal structure.
Your answers indicate that your group is likely to only have 1 member. Co-operatives are generally required to have at least 5 members (unless you are a ‘co-operative group’ or a different number of members is approved by the Registrar). If you do not believe that your group will have at least 5 members we recommend that you seek legal advice or speak to the regulator in your state or territory before adopting this legal structure.
Your answers indicate that your group does not have, and is unlikely to have 5 members. Co-operatives are generally required to have at least 5 members (unless you are a ‘co-operative group’ or a different number of members is approved by the Registrar). If you do not believe that your group will have at least 5 members we recommend that you seek legal advice or speak to the regulator in your state or territory before adopting this legal structure. We also have a recommendation for an alternative legal structure known as a ‘CLG’ which only requires 1 member.
Your answers indicate that your group is likely to only have 1 member.Co-operatives are generally required to have at least 5 members (unless you are a ‘co-operative group’ or a different number of members is approved by the Registrar). If you do not believe that your group will have at least 5 members we recommend that you seek legal advice before adopting this legal structure. We also have a recommendation for an alternative legal structure known as a ‘CLG’ which only requires 1 member.
Your answers indicate that your group has, or intends to have sufficient resources (people, time and money). This is important because due to strict liability offences in the CNL, groups will need resources to comply with CNL requirements in a timely way to avoid penalties (such as holding AGMs within required timeframes).
Your answers indicate that your group is likely to have limited resources (people, time and money). This is an important consideration because, due to strict liability offences in the CNL, groups will need resources to comply with CNL requirements in a timely way to avoid penalties (such as holding AGMs within required timeframes). If your group has limited resources or ability to meet reporting requirements we strongly suggest that you consider an alternative legal structure.
If a co-operative sounds like the right legal structure for your group click ‘Next’ and then select co-operative.
In your responses you indicated that your group intends to have a local focus, or focus on a specific state or territory. Because of this, we haven’t recommended an alternative legal structure known as a ‘company limited by guarantee’ (CLG).A CLG is a common legal structure for groups operating across multiple states/territories because it is a nationally regulated legal structure. Unless your group intends on becoming a charity, running a CLG can require more resources, or be more resource intensive than some other legal structures (such as an incorporated association). This is because there are a higher fees, penalties and a more complex regulatory regime for CLGs.If you would like to know more about becoming a CLG you may be interested in our fact sheets that discuss this legal structure. You may also wish to review or amend your preliminary responses to find out more about becoming a CLG. You should treat this option with caution and carefully consider whether it is the best legal structure for your group.
In your responses you indicated that your group intends to operate in multiple states or territories or intends to have a national focus. Typically this means that you are required to have a legal structure that is recognised nationally. There is one additional alternative legal structure for your organisation. The alternative option is to become an incorporated association and a ‘Registrable Australian Body’. Because of your responses to our questions, and a few complicating factors we did not present this as a recommended option for your group. If you would like to know more about becoming an incorporated association and a ‘Registrable Australian Body,’ you may be interested in our fact sheets that discuss this option. You should treat this option with caution and carefully consider whether it is the best legal structure for your group.
Based on your responses, it appears that we were unable to find a legal structure that suits the needs of your group.
We recommend you review our ‘Getting Started’ resources. These resources will help to guide you through setting up a not-for-profit organisation.
We will generally be unable to assist with any further questions about starting up unless you have read our Getting Started resources and can show that you have:
Not-for-profit Law is a program of Justice Connect. Justice Connect is a social justice organisation and community legal service and is itself a not-for-profit community organisation and registered charity. Not-for-profit Law provides free or low cost, high quality practical legal help for community organisations and advocates for improved standards and legal frameworks. You can find out more about Justice Connect or return to Not-for-profit Law.
Apply for free legal advice.
It may be possible for your group to register as a charity with the Australian Charities and Not-for-profits Commission (ACNC). Registering as a charity is optional, and can be done at a later stage if you are not ready for it right now. Not all not-for-profit groups are charities.
There are both advantages and disadvantages to registering as a charity. The advantages include:
The disadvantages include:
This section of the tool will help you work out your preliminary eligibility to register as a charity.
For your group to be registered as a charity, all of its purposes must be charitable. The Charities Act 2013 (Cth) sets out a list of charitable purposes.
Please select one or more of the purposes listed below that best matches the purposes of your group.
Each of the purposes listed below has its own legal meaning and may be narrower or wider than they appear. For more information, see the ACNC’s website.
You can find your organisation's purposes (sometimes called objects) in its governing rules, which may be called your constitution, rules, articles of association or trust deed.
To be registered as a charity, all your organisation’s purposes, except for purposes which are ancillary or incidental, must be charitable.
To be registered as a charity, your group's purposes must be for the 'public benefit'. This can be a tricky thing to work out and will sometimes require legal advice. The Charities Act 2013 (Cth) says a group's purpose will be for the public benefit if:
The following purposes are presumed to be for the public benefit:
If you’re still not sure, you can read more on the ACNC’s website.
The ACNC will not register a charity that has a disqualifying purpose. For example, dealing in illegal goods is a disqualifying purpose. If you're not sure whether your group's purpose disqualifies it from being charitable, read more on the ACNC's website.
A charity cannot be one person, a political party or a government body or organisation.
Based on your answers, it appears your group may be eligible to register as a charity.
For more information about registering as a charity, review our Charity Guide.
The next step is for, you to confirm the key decisions your group has made and we will take you to your tailored report.
Based on your answers, it appears that your group is not eligible for registration as a charity.
For more information about registering as a charity, review our Charity Guide
The next step is for you to confirm the key decisions your group has made and we will take you to your tailored report.
As you progressed through this tool you made the following key decisions about your new group:
You answered incorporate.
You answered remain unincorporated.
You decided on a company limited by guarantee.
You decided on an incorporated association.
You decided on an Indigenous corporation.
You decided on a co-operative.
Because your group chose to remain unincorporated you did not choose a legal structure.
We determined that your group may be eligible to be registered as a charity.
We determined that your group may not be eligible to be registered as a charity
The information in this report is based on the following:
Decide on a name for the organisation
Search the ABN Lookup and ASIC’s business name register to check whether the name you’d like is already in use.
Consider whether your group should apply for an Australian Business Number (ABN):
Check that becoming an Indigenous corporation is the right decision for your group:
Check that becoming a co-operative is the right decision for your group:
Check that becoming a company limited by guarantee is the right decision for your group:
Your answers indicate that your group is likely to have limited resources (people, time and money). This is an important consideration because running a CLG can require more resources, or be more resource intensive, than some other legal structures (such as an incorporated association). This is because there are a higher fees, penalties and a more complex regulatory regime for CLGs. If you plan to operate in multiple states or territories, and your group is tossing up between an incorporated association or a CLG, note that the process of registering and operating an incorporated association in other states and territories can be just as resource intensive as registering and operating a CLG.
Check that becoming an incorporated association is the right decision for your group:
It can be complicated and resource intensive to incorporate as an incorporated association and later decide to operate in more than one state or territory. Plan for success! If you think your group may operate in multiple states and territories in future, we recommend you consider incorporating as a company limited by guarantee, especially if your group intends to register as a charity with the ACNC.
Check that remaining an unincorporated group is the right decision for your group:
Read up on the steps for incorporating as an Indigenous corporation with the regulator:
Read up on the steps for incorporating as a company limited by guarantee with the regulator:
Get familiar with the legal requirements for running a company limited by guarantee:
Read up on the steps for incorporating as an incorporated association with the regulator:
Get familiar with the legal requirements for running an incorporated association:
Read up on the steps for incorporating as a co-operative with the regulator:
Consider registering as a charity with the ACNC and find out the steps for registration:
Consider whether your organisation should have and is eligible for DGR endorsement:
Consider whether your group should get insurance:
If your group plans to have volunteers, find out more about recruiting volunteers:
If your group plans to hire employees, find out more about recruiting employees:
If your group plans to work with other organisations, find out more about working with other organisations:
Note: The information in Justice Connect’s Getting Started tool is not legal advice. You might need legal advice on your organisation’s particular situation. This tool may only be used by not-for-profit organisations for non-commercial purposes. The report produced by this tool is based on the answers you have provided and Justice Connect hasn’t considered your organisation’s particular needs or operations. You should seek legal advice if you are not sure whether your organisation should incorporate or which legal structure to choose.
Click submit to download your summary report.