Not-for-Profit & Charity start-up Services

  • There are various structures available.

  • If a company is set up, there is annual compliance with ASIC and ACNC.

  • Various steps to obtain DGR status. Compliance with ACNC.

  • The constitution defines how the organisation’s will be directed.

  • The board members roles and responsibilities.

Establishing an Not-For-Profit entity

Various legal structures and laws apply to ‘not-for-profit’ organisations.

A not-for-profit organisation doesn’t operate for profit or personal gain; any profit made is used to further the organisation’s aims or, if the organisation is a registered charity, its charitable purpose.

That means all profits are put back into the organisation to continue to pay for its activities and functions and to achieve its mission.

Things to consider are if you need to incorporate an entity.

A not-for-profit organisation will fall into two broad categories, i.e. charities and other not-for-profit organisations that are not charities, e.g. community service organisations, cultural, recreational and business associations.

The main legal structures available to not-for-profit organisations are an incorporated association and a special purpose company limited by guarantee.

ATO compliance

Charities must register with the Australian Charities and Not-for-profits Commission (ACNC) before they can be endorsed by us for tax concessions or apply for specific categories of deductible gift recipient (DGR) status.

Before you register with the tax office you must obtain an Australian Business Number (ABN)

Your Not For Profit organisation may also have to register for taxes such as GST, FBT and PAYG withholding, superannuation, depending on the type of organisation and how it operates.

If people donate to your organisation, they will seek a tax deduction. To receive a donation, your organisation must meet specific criteria with the Australian Tax Office (ATO). Deductible gift recipients, known as DGR’s are organisations that are entitled to receive tax-deductible gifts and must be endorsed by the ATO eg charities. If your organisation is fundraising, certain factors will impact your tax, whether you are running or supporting fundraising events.

States and local governments also have their own laws regulating the fundraising activities of Not For Profit organisations.

ASIC registration and compliance

Various structures are available for Not For Profits and Charities. These are administered by the commonwealth government eg ASIC, and by the different state and territories. Some considerations include will your Not For Profit or Charity be based in one state of Australia or in various states? Do you want a separate legal entity that will be distinct from the founding contributors?

Constitution development

Every not for profit organisation needs to have a constitution. This document contains the organisation's rules, describes its basic structure and processes, and will usually specify the aims or purposes of the organisation. The constitution defines how the organisation’s members are admitted and how they are elected and appointed. You can adopt model rules and create your own rules. If you decide to write your own rules, you must ensure they meet legal requirements.

Board governance development

Your organisation plays a fundamental role within your community and it deserves the best of skills, perspective, and leadership that the board has to offer. A responsible board quickly gains the respect of the business leaders and people living in the community. Continued governance training shows that the board values governance education and takes its duties seriously.

When a board director accepts a position on a board, they automatically accept the duty of care, the duty of compliance, and the duty of loyalty. These duties are essential because board directors also accept legal liability for the decisions they make for their organisation.