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If you’re setting up a not-for-profit organisation, an Incorporated Association may be a suitable structure for your organisation.
What Are Your Options?
If you’re considering setting up a not-for-profit, charity or social organisation, there are several different structures that may fit your objectives:
- a Public Company Limited by Guarantee;
- an Incorporated Association; or
- a Proprietary Company (a for-profit company with a social purpose).
This article will discuss the factors to consider when looking to set up an Incorporated Association, and what type of organisations this structure is generally suited to.
What Is An Incorporated Association?
An Incorporated Association is a legal structure that is relatively simple to set up. It’s also more cost-effective than registering as a company.
Incorporated Associations are regulated at the state or territory level, so they’re usually best suited to organisations that operate primarily within their state or territory. For this reason, this structure is often chosen by smaller, not-for-profit community organisations, such as sporting clubs.
An Incorporated Association has a separate legal identity, meaning that it can legally enter into contracts, be sued and own property in its own name.
Key Factors To Consider When Thinking About Setting Up An Incorporated Association
The following factors generally determine whether or not an Incorporated Association is appropriate for your organisation:
- Geographic Operation: Incorporated Associations are regulated by the relevant state and territory legislation. They can only carry on most of their business in their state, so if the organisation is intending to have a nation-wide reach, an Incorporated Association may not be the most suitable structure. Another alternative is a Company Limited by Guarantee (“CLG”).
- Limited Liability: Instead of shareholders, the “owners” of an Incorporated Association are called “members”. The members are only liable for the amount they have agreed to contribute to the Incorporated Association (i.e. subscription fees), so their personal assets are not at risk in the event that something goes wrong.
- Members Required: As Incorporated Associations are regulated by the relevant area in which they register, the number of members required may vary.
Need Help?
If you’re not sure whether an Incorporated Association is the right choice for your organisation, you can read a bit more about the various not-for-profit structures in our article here.
Feel free to get in touch with us to discuss your options or for help setting up your Incorporated Association! You can reach us on 08081347754 or at [email protected].
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