Under a company structure, not-for-profit organisations or charitable organisations will generally be registered as public companies that are limited by guarantee. Limited by guarantee means that the members guarantee to pay a fixed but small amount of money in the event of the liquidation of the company.
Registration of a company creates a legal entity separate from its members. The company can hold property and can sue and be sued.
Companies are registered under the Corporations Act 2001
, which is Commonwealth legislation administered by the Australian Securities and Investment Commission (ASIC). A company's registration is recognised Australia-wide.
Information about how to register a company
can be found on the ASIC website.
A company limited by guarantee may also be registered without the word 'Limited' in its name. This is only possible if its constitution contains all of these conditions:
- it requires the company to pursue charitable purposes only, and to use its income for promoting those purposes
- it prohibits the company making distributions to its members and paying fees to its directors
- it requires the directors to approve all other payments the company makes to directors.
Advantages of a company limited by guarantee include:
Disadvantages of a company limited by guarantee include:
- it's more expensive to register than an incorporated association
- compliance with the requirements of the Corporations Act is more expensive and onerous than compliance with the Associations Act.
On this site
Things to consider when setting up a community organisation
Resources for community organisations
Managing a community organisation
Aboriginal community organisations
Frequently asked questions about community organisations