Starting a non-profit organisation in Australia involves complying with various legal requirements at different stages of the process. Non-profit organisations, also known as charities, must be registered with the Australian Charities and Not-for-profits Commission (ACNC) to qualify for tax concessions and exemptions.
The first step in starting a non-profit organisation in Australia is to choose an appropriate legal structure. The most common structure is a company limited by guarantee, which is a separate legal entity from its members and directors. The company must have at least three directors and a constitution that outlines its objectives and governance arrangements.
Once the legal structure has been chosen, the next step is to register the organisation with the Australian Securities and Investments Commission (ASIC) and obtain an Australian Business Number (ABN) and a Tax File Number (TFN) from the Australian Taxation Office (ATO). This will enable the organisation to operate as a legal entity, open a bank account, and conduct transactions.
The organisation must also apply for charity registration with the ACNC if it intends to seek tax concessions and exemptions. To qualify for charity registration, the organisation must have a charitable purpose that falls within one or more of the ACNC’s charitable purposes, such as relieving poverty, advancing education, or promoting health.
The application for charity registration requires the organisation to provide information about:
- its activities,
- governance arrangements, and
- finances, including its sources of income and how it plans to use its funds.
The ACNC will assess the application based on its eligibility criteria, including whether the organisation is operating for a charitable purpose, has appropriate governance arrangements, and is financially viable.
Once the organisation is registered as a charity, it must comply with ongoing reporting and governance requirements, including filing annual information statements with the ACNC and maintaining accurate records of its financial transactions. The organisation must also ensure that it is meeting its legal obligations. Legal obligations include workplace health and safety regulations. Moreover, it must also ensue that it is using its funds for its stated charitable purposes.
In addition to complying with legal requirements, starting a non-profit organisation in Australia also involves addressing practical considerations, such as securing funding and recruiting volunteers. Non-profit organisations rely on a range of funding sources, including government grants, donations from individuals and businesses, and fundraising activities.
To attract funding and support, non-profit organisations need to have a clear and compelling mission and demonstrate that they are making a positive impact in their area of focus. They must also have effective communication and marketing strategies to reach potential donors and volunteers.
To conclude, this blog has provided an overview of the legal requirements of starting a non-profit organisation in Australia. To do so, you must choose an appropriate legal structure, register with ASIC, the ATO, and the ACNC, and maintain ongoing compliance with reporting and governance requirements.
Author info:
John Bui is the Principal Solicitor of JB Solicitors – a law firm based in Sydney, Australia. John is a Nationally Accredited family law Mediator and Arbitrator with over 10 years’ experience in family law and commercial litigation.
