Congratulations on the good works that your charity has done to date! If your charity has completed its mission, you may want to apply for voluntary deregistration. This article sets out the steps to close a charity, where the charity is a public company registered with the Australian Securities and Investments Commission (ASIC) that:
- is also registered with the Australian Charities and Not-For-Profit Commission (ACNC); and
- has deductible gift recipient (DGR) status from the Australian Tax Office (ATO).
There are six steps:
Prepare for Voluntary Deregistration
The first step to close a charity is to convene a directors’ meeting. At this meeting, all directors should agree to proceed with the steps to voluntarily deregister. You should record this decision in a written directors’ resolution.
Before taking any other steps, you must also confirm that the charity has no outstanding debts. Similarly, you need to pay all outstanding fees due to ASIC. These need to be paid before lodging an application for voluntary deregistration.
Convene a General Meeting
Every member of your charity must agree to its closure. Specifically, you require at a general meeting:
- 100% of votes cast by members entitled to vote, to vote in favour of the deregistration; and
- at least 75% of votes cast by members entitled to vote, to vote in favour of the special resolution regarding the distribution of assets.
The Board is generally required to give 21 days’ written notice of the general meeting to the members, the directors and the company auditor. The notice of meeting must specify:
- the place, day and hour of the meeting;
- the general nature of the meeting’s business — that you intend to voluntarily deregister the company and that you require all members to agree;
- the details of special resolutions (such as where the charity will transfer its surplus assets to); and
- that members who cannot attend are entitled to appoint a proxy.
Distribute Surplus Assets
To qualify for voluntary deregistration, the company will need to have assets of less than $1,000. If you have surplus assets in the charity fund, you need to distribute these in accordance with the charity’s constitution.
To distribute surplus assets, a charity’s constitution will usually require:
- a general meeting to pass a special resolution of the members to decide on which institution you will transfer the assets to; and
- that you transfer assets to an institution which also has DGR status.
Revoke Registration with ACNC
To revoke the charitable registration with ACNC, you need to submit:
- your most recent Annual Information Statement to ACNC; and
- Form 5A: Application to revoke charity registration to ACNC.
This is the only correspondence that you need to have with ACNC to close a charity.
Inform the ATO
To inform the ATO, you only need to call them to say that you intend to wind up the charity. You should also make a note for your files. Furthermore, you will need to cancel the charity’s Australian Business Number (ABN).
Lodge an Application to Deregister with ASIC
- has secured the agreement of all its members to deregister (you obtained this approval at the general meeting);
- is not conducting business;
- has assets worth less than $1,000;
- does not have any outstanding debts;
- is not involved in any legal proceedings; and
- has paid all ASIC fees and penalties.
You can lodge the form online, through your ASIC account. ASIC will then send you an invoice which you need to pay within 28 days. Once ASIC has deregistered your charity, which may take up to two months, they will send you a confirmation notice.
To close a charity, you must take six steps:
- prepare for voluntary deregistration, including paying all debts;
- convene a general meeting;
- distribute surplus assets;
- revoke registration with ACNC;
- inform the ATO; and
- apply to deregister with ASIC.
If you would like to read more on how to wind up your charity, the Australian Charities and Not-for-profits Commission outlines the process.
Was this article helpful?
We appreciate your feedback – your submission has been successfully received.