How to Register a Charity

Date: November 11, 2020
Author: Olivia Cassano
Posted in: Insights

Making the world a better place often begins with a small idea. But this idea must be turned into a reality before it can affect the real world. Turning an idea into a reality requires organising, planning, and some legal expertise. The following article will outline the steps you should consider to help you turn your idea into a charitable organisation.

Purpose

To be officially recognised as a charity, your organisation needs to have a clearly stated and specific purpose. An organisation won’t be recognised as a charity if it has only a vague purpose of ‘helping people’. Moreover, the organisation’s purposes must be of the kinds which are legally recognised as charitable, such as the advancement of health, education, culture, or religion. It also must benefit the public or a section of the public, not only specific individuals.

Structure

There are several choices for your organisation’s legal structure. These are:

  • Incorporated associations (most common)
  • Company limited by guarantee (in which directors’ have a very small liability for debts)
  • Non-distributive co-operative (formally known as non-trading co-operative)
  • Indigenous corporation
  • Charitable trust (such as a public or private ancillary fund)

You will need to register your organisation with either ASIC or Consumer Affairs Victoria, depending on your legal structure. You will also need to register with the Australian Business Registry (ABR).

Board

Your organisation must have an elected board. You will require either 3 or 5 board members, depending on the legal structure you chose. The board members must be ‘responsible persons’ which generally means that they are a member of a profession. A profession is generally defined as an occupation which requires a degree and is regulated by a code of conduct. The board oversees crucial decisions in the operating of the organisation, appointing key personnel, and ensuring the overall success of the organisation. Board members must act with reasonable care and diligence, and cannot have any conflicts of interest.

ACNC

Once you have a legal structure and board, you can apply to register your charity with the Australian Charities and Not-for-profit Commission (ACNC). Much of the information you have prepared in registering as a legal entity with prove useful at this stage. The ACNC will ask you to provide details about the purposes and structure of your organisation, and it is best to be well prepared.

Tax Benefits

Once you have registered as a charity with the ACNC, you can apply to the Australian Tax Office (ATO) for tax benefits such as an Income Tax Exemption or Deductible Gift Recipient (DGR) status (which makes donations to your charity tax-deductible).

Fundraising licence

Lastly, you will need to register for a fundraising licence. Note that there may be separate federal and state licences and different licencing requirement for each state.

FAL Lawyers are experts in registering charities. Contact us to enquire about how one of our charity lawyers can help.

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