Things to consider
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If you incorporate
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If you do not incorporate
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Membership
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Your organisation must have at least five members.
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Your organisation can have any number of members.
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Not-for-profit status
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Your organisation must operate not for profit, and can trade only if:
- its main purpose is charitable
- its rules ensure its assets will be distributed for charitable purposes if it is wound up or dissolved
- its rules contain a clause authorising trading.
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Your organisation is not restricted from trading or doing business for profit.
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Legal status
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Your organisation becomes a ‘legal person’ (that is, a legal entity that stays the same even if its members change). It can do the following things in its own name:
- accept gifts or bequests
- buy and sell property
- invest and borrow money
- open a bank account
- sue and be sued
- take out public liability insurance.
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Your organisation cannot do any of the things described under ‘if you incorporate’, at left.
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Legal protection for members
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Members and office bearers are protected against personal liability for the organisation’s debts and other legal obligations.
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Members could be personally liable if the organisation incurs debts or has legal problems.
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Statutory obligations
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Your organisation must comply with requirements for accounting, auditing and annual reporting. Failing to do so can result in prosecution, penalties or deregistration.
See the Responsibilities of an incorporated association page for more information.
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Your organisation will not have the expense of meeting statutory obligations.
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| Costs |
Your organisation must pay fees for incorporating and lodging some administrative forms. There are also costs involved in meeting ongoing statutory obligations, such as auditing.
See the Fees, forms and online transactions page for more information.
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Your organisation will not have the expense of meeting statutory obligations.
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Disputes
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Your organisation must either have its own procedure for resolving internal disputes, or use the procedure in the model rules for incorporated associations.
See the Resolve a dispute page for more information.
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Your organisation is not required to have or use a dispute resolution procedure.
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Contracts and agreements
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Your organisation can enter into contracts and agreements in its own name. This offers more certainty to potential contracting parties such as lenders, lessors, employees and suppliers of goods and services.
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Your organisation cannot enter into contracts or agreements in its own name.
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Grants
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Your organisation will be eligible to apply for a larger range of government and non-government grants.
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Your organisation will not be able to apply for grants that require applicants to be incorporated.
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