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The decision about incorporation is an important decision for community groups. Incorporation has significant legal consequences, many beneficial. However, incorporation also brings with it responsibilities to report to government. Some groups in the early stages of development explore the potential to be 'auspiced' by an existing organisation. Find out more about auspicing on our Auspicing page.
What does incorporation mean?
Incorporation gives your group its own legal identity (the group becomes a 'separate legal entity' from its members) . The group can enter into contract, sign a lease, employ people, and sue and be sued.
Incorporated groups are incorporated under law (which can be either state or federal) and report to the regulator responsible for their type of structure, for example the Australian Securities and Investments Commission.
Incorporated groups follow a particular structure, with group rules (or constitution), members, and a governing body (often called a board or committee).
Being incorporated has consequences for people who are going to be on the board or committee of management of a not-for-profit group, as these people have legal duties in their roles.
Given the importance of the decision about whether or not to incorporate, this may be an issue on which your group may want to seek specific legal advice.'
Should we incorporate?
The fact sheet below explains in more detail what incorporation means and provides a general overview of some of the main differences between an ‘unincorporated' and an ‘incorporated' group including information on:
- what it means to incorporate and the benefits
- the practical things to consider when deciding whether to incorporate, and
- the obligations of incorporated groups.