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Choosing a legal structure

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If your group has decided to incorporate, the people involved in your group will need to make a decision about which incorporated legal structure will best suit the aims, activities and culture of the organisation.

Choosing the right incorporated structure for your organisation is a very important legal decision, as it has consequences for:
  • where your organisation is allowed to operate (ie. only in one state or across Australia)
  • the costs of your organisation's operations
  • who your organisation must provide information to (ie. a government regulator), and
  • what kind and level (detail) of information your organisation must provide.

Because choosing an incorporated legal structure has such important consequences for the operation of an organisation, many organisations may want to seek specific legal advice on this issue.

The following legal information resources outline the main options available, and the characteristics of each kind of incorporated structure.

If you are setting up a social enterprise, go to the Not-for-profit Law page on Social Enterprises.

The fact sheet below provides an overview of the main characteristics of incorporated legal structures which are suitable for not-for-profit community organisations including:

  • incorporated associations
  • companies limited by guarantee
  • indigenous corporations, and
  • co-operatives.

For many Victorian not-for-profit organisations, the decision about which incorporated structure to choose often comes down to a decision between being an incorporated association or a company limited by guarantee. The following guide sets out in more detail the differences between these two structures, and the benefits and limitations of both structures.

This Guide explains how the following factors influence a choice between structures:

  • where the group will 'operate' or carry out 'activities'
  • levels of available expertise and resources for ongoing compliance
  • whether the organisation will seek charitable tax concessions or become registered as a charity, and
  • whether the organisation will have money to pay ongoing lodgment fees.

Before reading the guide it is important to think about whether your group will be (or will seek to be) a charity.

The fact sheet below provides an overview of the main characteristics of incorporated legal structures which are suitable for not-for-profit community organisations including:

  • incorporated associations
  • companies limited by guarantee
  • indigenous corporations, and
  • co-operatives.

For many NSW not-for-profit organisations, the decision about which incorporated structure to choose often comes down to a decision between being an incorporated association or a company limited by guarantee. The following guide sets out in more detail the differences between these two structures, and the benefits and limitations of both structures.

This Guide explains how the following factors influence a choice between structures:

  • where the group will 'operate' or carry out 'activities'
  • levels of available expertise and resources for ongoing compliance
  • whether the organisation will seek charitable tax concessions or become registered as a charity, and
  • whether the organisation will have money to pay ongoing lodgment fees.

Before reading the guide it is important to think about whether your group will be (or will seek to be) a charity.

The fact sheet below provides an overview of the four common legal structures that can be used to incorporate a not-for-profit community organisation based in Queensland:

  • incorporated associations
  • companies limited by guarantee
  • indigenous corporations, and
  • co-operatives.

For many Queensland not-for-profit organisations, the decision about which incorporated structure to choose often comes down to a decision between being an incorporated association or a company limited by guarantee. The following guide sets out in more detail the differences between these two structures, and the benefits and limitations of both structures.

This Guide explains how the following factors influence a choice between structures:

  • where the group will 'operate' or carry out 'activities'
  • whether the organisation will seek charitable tax concessions or become registered as a charity
  • whether the organisation will have capacity to pay fees
  • requirements for annual reporting, audits and reviews, and
  • other factors to consider. 

Before reading the guide it is important to think about whether your group will be (or will seek to be) a charity.

The fact sheet below provides an overview of the four common legal structures that can be used to incorporate a not-for-profit community organisation based in South Australia:

  • incorporated associations
  • companies limited by guarantee
  • indigenous corporations, and
  • co-operatives.

For many South Australian not-for-profit organisations, the decision about which incorporated structure to choose often comes down to a decision between being an incorporated association or a company limited by guarantee. The following guide sets out in more detail the differences between these two structures, and the benefits and limitations of both structures.

Before reading this resource, it is important to think about whether your group will be (or will seek to be) a registered charity.

This guide explains how the following factors influence a choice between structures:

  • where the group will 'operate' or carry out 'activities'
  • whether the organisation will seek to become registered as a charity
  • whether the organisation will be able to pay initial and ongoing fees, and
  • the differing reporting requirements for incorporated associations and CLGs.

The fact sheet below provides an overview of the four common legal structures that can be used to incorporate a not-for-profit community organisation based in the Northern Territory:

  • incorporated associations
  • companies limited by guarantee
  • indigenous corporations, and
  • co-operatives.

For many Northern Territory not-for-profit organisations, the decision about which incorporated structure to choose comes down to a decision between being an incorporated association or a company limited by guarantee. The following guide sets out in more detail the differences between these two structures, and the benefits and limitations of both structures.

Before reading this guide, it is important to think about whether your group will be (or will seek to be) a registered charity.

This guide explains how the following factors influence a choice between structures:

  • where the group will 'operate' or carry out 'activities'
  • whether the organisation will seek to become registered as a charity
  • whether the organisation will be able to pay initial and ongoing fees, and
  • the differing reporting requirements for incorporated associations and CLGs.

The fact sheet below provides an overview of the four common legal structures that can be used to incorporate a not-for-profit community organisation based in the ACT:

  • incorporated associations
  • companies limited by guarantee
  • indigenous corporations, and
  • co-operatives.

For many ACT not-for-profit organisations, the decision about which incorporated structure to choose comes down to a decision between being an incorporated association or a company limited by guarantee. The following guide sets out in more detail the differences between these two structures, and the benefits and limitations of both structures.

Before reading this guide, it is important to think about whether your group will be (or will seek to be) a registered charity.

This guide explains how the following factors influence a choice between structures:

  • where the group will 'operate' or carry out 'activities'
  • whether the organisation will seek to become registered as a charity
  • whether the organisation will be able to pay initial and ongoing fees, and
  • the differing reporting requirements for incorporated associations and CLGs.

The fact sheet below provides an overview of the four common legal structures that can be used to incorporate a not-for-profit community organisation based in Tasmania:

  • incorporated associations
  • companies limited by guarantee
  • indigenous corporations, and
  • co-operatives.

For many Tasmanian not-for-profit organisations, the decision about which incorporated structure to choose comes down to a decision between being an incorporated association or a company limited by guarantee. The following guide sets out in more detail the differences between these two structures, and the benefits and limitations of both structures.

Before reading this guide, it is important to think about whether your group will be (or will seek to be) a registered charity.

This guide explains how the following factors influence a choice between structures:

  • where the group will 'operate' or carry out 'activities'
  • whether the organisation will seek to become registered as a charity
  • whether the organisation will be able to pay initial and ongoing fees, and
  • the differing reporting requirements for incorporated associations and CLGs.

Fundraising Trusts and Grant Making Foundations

If you are interested in setting up a fundraising trust entity or grant making foundation, our fact sheet below may assist you in considering whether this is the right approach for you, and includes links to further resources.  It is important to understand a trust or a foundation is not the same as a not-for-profit organisation.

This fact sheet contains information regarding the following:

  • what are foundations and charitable trusts?
  • how to set up a foundation or charitable trust, and
  • alternatives to setting up a foundation.

For organisations interested in setting up a private ancillary fund, the Australian Tax Office (ATO) provides a model Private Ancillary Fund trust deed.  To access the model trust deed visit the ATO website

Related links

  • Victorian Department of Human Services (DHS)

    DHS has produced a number of helpful videos on community foundations, including an introduction, fundraising, grant recipients, grantmaking, structure and funds development. Although developed in Victoria, these videos are useful for organisations in all Australian jurisdicitons.

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