Should your club incorporate?

Your organisation must have at least five members.

Your organisation can have any number of members.

Your organisation may trade, but not in order to distribute profit to its members.

Your organisation is not restricted from trading or doing business for personal profit.

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 with greater ease.

Your organisation cannot do any of the things described under ‘if you incorporate’, at left. These would have to be done by an individual member on behalf of the unincorporated association’s members.

A member of an unincorporated association is usually personally liable for contracts they enter into and decisions they make.

Members and office bearers are protected against personal liability for the organisation’s debts.

Members could be personally liable if the organisation incurs debts or has legal problems.

Your organisation and its office bearers must comply with requirements in the Associations Incorporation Reform Act 2012, including accounting, auditing and annual reporting requirements. 

Your organisation is not bound by the Associations Incorporation Reform Act 2012. However, your organisation is still bound by other state and federal laws, such as tax laws.

Your organisation must pay fees for incorporating and lodging some administrative forms. There may also be costs involved in meeting ongoing statutory obligations, such as financial reporting.

Your organisation will not have the expense of meeting statutory obligations of incorporation.

Your organisation must either have its own procedure for resolving internal disputes, or use the procedure in the model rules for incorporated associations.

Your organisation is not required to have or use a dispute resolution procedure.

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.

Your organisation cannot enter into contracts or agreements in its own name.

Your organisation may be eligible to apply for a larger range of government and non-government grants.

Your organisation will not be able to apply for grants that require applicants to be incorporated.