Charities and not-for-profits in Australia work under several sets of rules at once: Commonwealth charity and tax law, state law on associations and fundraising, and the organisation’s own constitution or rules. Most are run by volunteers with little time left for legal housekeeping.
For community, cultural and faith organisations, including Chinese community associations, temples, churches and language schools, there is often a further layer. They were built on trust, and their documents do not always keep up with how they have grown. This article follows an organisation’s life cycle and the legal issues that tend to arise at each stage.
Choosing a structure
The structure decides who controls the organisation, who can be held liable, and which regulators it deals with. The main options are:
- Incorporated association. This is the usual choice for local community groups in Victoria. It is formed under the Associations Incorporation Reform Act 2012 (Vic) and registered with Consumer Affairs Victoria (CAV). It must have rules. Where its own rules do not deal with certain required matters, the model rules fill the gap.
- Company limited by guarantee. This is formed under the Corporations Act 2001 (Cth) and governed by a constitution. It can suit organisations operating in several states. Where the company is a registered charity, the ACNC takes over many matters that ASIC would otherwise oversee.
- Trust. A charitable trust is governed by its trust deed and general trust law. Changing its purposes later can be difficult.
- Unincorporated association. This has no separate legal identity. Property, accounts and contracts sit in individuals’ names, which can create personal exposure and continuity problems.
The right choice depends on where the organisation operates, whether it wants voting members, whether it will seek tax concessions, and what property it will hold.
ACNC registration and tax concessions
An organisation that meets the definition of a charity in the Charities Act 2013 (Cth) may register with the Australian Charities and Not-for-profits Commission (ACNC). Registration is generally needed to access Commonwealth charity tax concessions. Registered charities must then meet the ACNC governance standards.
Deductible gift recipient (DGR) endorsement is a separate step. It is administered by the ATO and allows donors to claim tax deductions for gifts. For most non-government organisations, DGR endorsement now requires charity registration. Not-for-profits that are not charities may still self-assess as income tax exempt. Since the 2023–24 income year, those with an active ABN have had to lodge an annual self-review return with the ATO. State tax concessions have their own tests. Our companion article on registering a charity and seeking DGR endorsement discusses these issues further.
Constitution and rules
The constitution or rules do real legal work. They set out the purposes, the not-for-profit and winding-up clauses that regulators look for, who the members are, how meetings and elections run, and how the document can be changed. Problems arise when the document no longer matches what the organisation actually does, or when members have been relying on an informal translation.
Governance and policies
Responsible people, whether they are called directors, committee members or trustees, owe duties of care, honesty and loyalty. Policies make those duties work in practice, for example on conflicts, complaints, privacy, child safety, whistleblowing, volunteers and financial delegations. A policy only helps if the board formally adopts it and follows it.
Contracts and property
As organisations grow, they sign more agreements, including:
- agency agreements and joint venture arrangements with other bodies;
- service and funding agreements;
- facility use or hire agreements for halls and classrooms;
- leases;
- planned-giving instruments.
Each can carry liabilities the committee did not anticipate. Property raises a more basic question: whose name is on the title, and on what terms?
Fundraising and gifts
In Victoria, the Fundraising Act 1998 (Vic) generally requires an organisation to register with CAV before it fundraises from the public, unless an exemption applies. Registered charities have a streamlined arrangement. Raffles and other gaming are regulated separately. Capital programs, gift acceptance, donor conditions and recognition raise their own questions; a separate article covers bequests, planned giving and capital campaigns. Private foundations can be set up as private or public giving funds, called ancillary funds until 1 October 2026, which our article on family philanthropy discusses.
Restructuring and wind-up
Organisations may merge, change structure or reach the end of their purpose. Each path involves the governing document, the members, the regulators and the rules on where surplus assets must go. A separate article covers amalgamation, restructure and wind-up.
Common pain points for community, cultural and faith organisations
- Committee succession. The founding generation is ageing, and younger members may be willing to help but are unsure what the role involves.
- Informal record-keeping. Minutes are kept in group chats, the register of members is out of date, and decisions are remembered rather than recorded.
- Founders holding property in their own names. A hall or a bank account may have been put in a founder’s name decades ago. If that founder dies or falls out with the committee, the position can be uncertain.
- Bilingual members. The rules may exist only in English while meetings are held in Mandarin or Cantonese. Members may have different understandings of what was agreed.
We have worked with community organisations, schools, faith and cultural associations on governance from the inside, including at board and committee level.
How we work with your board or committee
We act for the organisation as a whole rather than for one faction within it. Where it helps, we attend board or committee meetings to explain options. We give explanations in English, Mandarin or Cantonese so that every member can take part in the decision. We work with your auditor or accountant so that the legal and financial sides line up. Larger projects can be staged so volunteers can manage them.
Questions to discuss
- Is our current structure still the right one for what we do now?
- Are we registered with the ACNC, and do we have or need DGR endorsement?
- Does our constitution reflect how we actually operate?
- Which policies have we formally adopted, and are they followed?
- Whose name is on our property titles and bank accounts?
- Who will take over key roles in the next few years?
Frequently asked questions
Do I need a lawyer to start a charity in Australia?
It is not a legal requirement. However, the choice of structure and the wording of the purposes, not-for-profit and winding-up clauses affect ACNC registration and any later DGR application.
What is the difference between an incorporated association and a company limited by guarantee?
An incorporated association is a state-based structure, registered in Victoria with CAV. A company limited by guarantee is a national structure under the Corporations Act. Which one suits an organisation depends on its scale, where it operates and how it wants to be governed.
Is every charity able to receive tax-deductible donations?
No. ACNC registration and DGR endorsement are separate, and many registered charities are not DGRs. Whether an organisation can obtain DGR endorsement depends on its purposes and activities and the available DGR categories.
Every family’s situation is different, and the answer often turns on details. Book a consultation so we can review your documents and circumstances before you act.
How Chua Tan Associates can help
Chua Tan Associates assists charities and not-for-profits across Australia throughout their life cycle. Our work includes:
- incorporation, amalgamation, reorganisation and wind-up;
- reviewing and revising constitutions and rules;
- governance, director, membership and volunteer structures, agreements and disputes;
- applications for charity registration and DGR endorsement, and ongoing charity compliance;
- contracts, including agency, joint venture, service, facility use, lease and planned-giving instruments;
- policy development;
- development, capital programs, planned giving and fundraising;
- establishing private foundations through private and public giving funds.
Justin Chua is a Nationally Accredited Mediator and an Accredited Family Business Advisor. He trained in accounting (Bachelor of Commerce, accounting major). We work alongside the organisation’s auditor, accountant and registered tax agents, and advise in English, Mandarin and Cantonese.
Important: This article is general information only and must not be relied on. It is not legal, tax or financial advice, does not take your circumstances into account, and may not reflect changes in the law after publication. Laws of other countries may also apply. Do not act or refrain from acting on the basis of this article. Reading it or contacting us does not create a lawyer–client relationship. Please book a consultation for advice on your situation.
Related reading
Chua Tan Associates acts for families, executors, trustees and their professional advisers in estate planning, estate administration and estate disputes in Australia and across borders. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal or tax advice.
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