Background

The company limited by guarantee legal structure is now widely considered the most optimal incorporated legal structure for charitable organisations, particularly for those:

• undertaking inter-state activities, i.e. operating on a national level

• delivering commercial services, e.g. disability services, aged care services, education, or other fee-for-service activities etc.

• holding substantial assets and property, or

• that want to adopt best practice in corporate governance.

In light of these reasons, organisations structured as incorporated associations are increasingly deciding to ‘transition’ under State laws to a not-for-profit public company limited by guarantee structure under the Corporations Act.

Process

Generally speaking, the process involves a mix of internal and external approvals, including approvals from the association’s management committee, members, as well as State/Territory and Commonwealth regulatory bodies.

Importantly, it is essential that each piece of legislation and the association’s governing document are carefully followed in order to avoid potential time delays, errors, unnecessary costs, and to ensure any charitable endorsements, and associated State and Commonwealth tax concessions are preserved.

We can assist

Hundt Law’s specialist team can assist your organisation with transitioning from an incorporated association to a company limited by guarantee. For more information, please contact Hundt Law’s dedicated team on (07) 3741 6905 or contact@hundtlaw.com.au

Disclaimer: The information above is of a general nature, must not be relied on, and is not a substitute for obtaining formal legal advice that is specific to your circumstances.