Question: What Should I Consider Before Purchasing a Building in a Charity’s Name?Answer:
If you have set up a formal legal structure for your charity and intend to use a building for your charity’s activities then, yes — you can purchase a building in your charity’s name. But you should check the following first.
1. Are You Set up as a Company Limited by Guarantee or Incorporated Association?
These two structures have their own legal identity which means that the company or association can own property in its name or enter into contracts. It also means that it can be sued or sue others.
If you are unsure about your legal structure, you can check whether you report to ASIC or a State department like Consumer Affairs Victoria or NSW Fair Trading. You can also search your charity’s name on the Australian Business Register. If you have an ABN, your charity will be listed, and it will show what type of “entity” you are.
|Other Incorporated Entity||Incorporated Association|
|Australian Public Company||Company Limited by Guarantee|
2. What are your Charity’s Objectives and Purposes?
You must use any money that your charity raises or spends to fulfil the objectives or purposes of your charity. If the building you want to purchase will not be used for the purpose, then your charity will not be adhering to its constitution. Check your charity’s constitution or governing rules and make sure that what you want to use the building for will fit the objectives/purposes listed.
3. Financial Reporting
It’s important that when your charity purchases something, including a new building, that you accurately record this purchase in your accounts. You must provide these to the ACNC when you report yearly, and you will need to list the assets (including property) that your charity owns.