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In Australia, you can choose to structure your company as limited by guarantee or shares. If your company limited by guarantee is also a charity, the Australian Charities and Not-for-Profits Commission Act, 2012 (ACNC) will apply along with the Corporations Act 2001 (Cth) (the Corporations Act). Below, we explain your rights operating under this structure including access to records, voting rights and appointing directors.

1. What is a Company Limited by Guarantee?

A company limited by guarantee is a public company set up under the Corporations Act or the ACNC Act. ‘Limited by guarantee’ refers to the amount the members (or shareholders) are willing to contribute if the company winds up. This amount will ‘limit’ their liability.

If you are unsure whether your company is limited by guarantee, you should first check your share certificate. Next, you could search the ABN register and see if your organisation is listed as an ‘Australian Public Company’ as well as the ASIC register.

2. Are You a Member?

To become a member, you will have needed to provide written consent either before the company’s registration or when the company enters your name on the members’ register. If you are unsure, you can always ask the Secretary to look at the register of members.

3. What Are Your Rights?

The company should have a constitution which contains your rights under the Corporations Act as well as any additional rights. Your company has an obligation to provide you with a copy within seven days if you want to access this document. If your organisation is a charity, you can also find the constitution on the ACNC Register. Of the many rights you have as a member, we will briefly discuss those regarding:

  • access to records;
  • meeting and voting rights; and
  • appointing directors.

Access to Records

As well as a right to access the company’s constitution and inspect the register of members, you also have a right to inspect your organisation’s minutes for members’ meetings.

Your organisation must also disclose all remuneration paid to directors if asked by 100 members or members with 5% of the total voting power.

Additionally, if your organisation has revenue of more than $250,000, you have a right to view the yearly director’s report. If the organisation has less than $250,000 in revenue, then it only has to provide this information if directed by members with more than 5% voting power.

If your organisation is a charity, then you have the right to receive information in line with the Governance Standards.

Meeting and Voting Rights

You have the right to attend and vote at general meetings, and to receive notice of the meetings 21 days beforehand. You can also call a meeting of members with 5% or more of total voting power.

If your organisation is a charity, there are no set rules for your rights in regards to meetings. Instead, the charity must take reasonable measures to ensure members have an opportunity to raise concerns. These measures include allowing members to be involved in voting, holding annual general meetings and providing reports.

Appointing Directors

You also have particular rights concerning directors including:

  • voting to appoint a director to the board;
  • removing the director from the board; and
  • setting the amount or remuneration paid to a director.

4. What If I Am Denied My Rights?

You should first try and resolve this through the complaints procedure in your constitution. If your organisation is silent on this matter, you can make a complaint to ASIC. Court proceedings should be your last resort. Likewise, if your organisation is a charity, you can also complain to the ACNC.

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If you have any questions about companies limited by guarantee or need assistance setting one up, get in touch with our experienced business structuring lawyers on 1300 544 755.

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