On this page
- What is the purpose of an amalgamation or merger?
- Planning and due diligence
- What is an amalgamation?
- What is a merger?
- Amalgamation process for incorporated associations
What is the purpose of an amalgamation or merger?
Sometimes not-for-profit organisations want to formally join together. This may be for a number of reasons – for example, the organisations would be more sustainable and efficient if joined together, or for ease of securing government funding.
Two or more organisations can formally join together or merge in a variety of different ways. We have explained the difference between an amalgamation and a merger below.
Planning and due diligence
Before embarking on an amalgamation or merger, organisations typically:
- conduct ‘due diligence’ on each other
- have a thorough understanding of the organisation or organisations they are thinking about combining with, and
- check whether there are any problems or issues that should be addressed before undertaking the amalgamation or merger
Due diligence gives organisations the opportunity to make an informed decision about whether an amalgamation or merger is in their best interests.
It involves each organisation:
- investigating one another by requesting certain information from one another (including corporate, financial, contractual and insurance documents), then
- reviewing and analysing that information, often with the assistance of professionals such as lawyers and accountants
Organisations should particularly consider any risks or liabilities that may attach to an organisation as these may be inherited in a merger. For example, risks or liabilities relating to pending litigation or tax debts.
Don’t know your legal structure?
To find out your organisation’s legal structure:
- If your organisation is a charity, search the ACNC register. Once you have found your organisation’s entry, you can check your rules or constitution which should state the type of legal structure. You can search by name and by ABN or ACN.
- If your organisation is not a charity, start with the Australian Business Register search. You will need the name and ideally the ABN or ACN of your organisation. If your group is a company limited by guarantee (a federal not-for-profit structure) this will be indicated in the entry as ‘Australian public company’. If your group is a state-based not-for-profit structure such as an incorporated association or a co-operative, it’s likely that the ABR will list it as 'other incorporated entity'. You will then need to search your state or territory regulator of not-for-profits to confirm your structure.
What is an amalgamation?
Amalgamation is a process which can be used by two or more incorporated associations (based in the same state or territory) to combine together to create a single incorporated association.
The benefit of an amalgamation process is that certain steps usually involved in a merger happen automatically, which makes the process of joining the organisations together easier and less expensive. The amalgamation process is available to incorporated associations in all jurisdictions in Australia except the Northern Territory, where a statutory transfer process can be used instead.
Where available, the amalgamation process is set out in the incorporated association’s applicable legislation in each state and territory. When individual incorporated associations amalgamate, they form a new incorporated association, and the relevant state regulator will cancel the incorporation of the individual associations without needing to wind them up in accordance with the Corporations Act 2001 (Cth).
What is a merger?
If an amalgamation is not available for your organisation, a merger process can be used. Unlike amalgamations, a merger is not based on a legislative process and is largely customisable.
A merger involves an agreement between two or more organisations to form a single organisation. A merger can take place in a variety of different ways depending on the preferences and structures of the organisations involved, including when:
- one or more organisations becomes part of another, or
- two or more organisations merge to create a new organisation
Mergers can be complex. It is therefore important that organisations seek independent legal advice before they decide to merge and to assist them through the merger process.
Our fact sheet covers:
- what is a merger?
- the advantages and disadvantages of a merger
- the merger process
Amalgamation process for incorporated associations
Our fact sheets cover:
- what is amalgamation?
- what is the effect of amalgamation?
- what are some of the key issues to consider before amalgamating?
- what are some of the potential advantages and disadvantages of amalgamation?
- what is the amalgamation process?
- what does your organisation need to do after amalgamating?
The content on this webpage was last updated in March 2022 and is not legal advice. See full disclaimer and copyright notice.