Congratulations on considering setting up a not-for-profit organisation or a charity. This article focuses on the legal documents that you may need during this process.
This article is part 2 of a 5-part series to assist charities and not-for-profit organisations understand their legal needs. Part 1 focussed on choosing the right structure. Part 3 will discuss the requirement for registering with the Australian Charities and Not-for-profits Commission. Part 4 will consider what is a Public Benevolent Institution, a health promotion charity and a religious charity, and Part 5 will seek to explain the process for obtaining deductible gift recipient (DGR) status.
Your legal documents depend on your legal structure
Your not-for-profit organisation or charity must comply with legal requirements, including having certain governing documents. The governing documents depend on the structure of your charity.
For example, generally speaking, if your charity is:
- an incorporated association, the governing documents are the articles of association.
- a company limited by guarantee or other company under Corporations Act 2001, the governing document is the constitution.
- a trust, the governing document is the trust deed.
- a co-operative, the governing document is the constitution.
- an unincorporated association, the governing document is the rules.
What does the government document need to cover?
The name, detail and exact nature of the governing instruments differ depending on the structure of the organisation. However, generally speaking, the governing instrument needs to cover the following:
- The objects of your organisation;
- The powers of your organisation i.e. how it will achieve its objects;
- A non-distribution of profits provision which states that funds of your organisation cannot be distributed to the members;
- Management of the organisation including who will run your organisation and how it will be run;
- Internal arrangements for meetings, voting, looking after funds, etc.;
- An amendment provision on how the instrument can be altered; and
- A dissolution provision dealing with what happens to the organisation in the event it is wound up.
A charities lawyer can help you create the governing documents that you need. If you require assistance in drafting or reviewing any of these documents, check the ACNC Factsheet on governing documents for charities.
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