The Law Handbook 2024

614 Section 6: Houses, communities and the road A company limited by guarantee must have a minimum of one member, three directors and a company secretary. It is possible for a person to hold more than one of these roles. A company limited by guarantee must comply with various requirements of the Corporations Act (especially in relation to meetings and the lodgment of accounts). A company limited by guarantee will report to the Australian Securities and Investments Commission ( ASIC ). It will have different reporting requirements depending on its size (or ‘tier’) and whether it is endorsed as a deductible gift recipient ( DGR ) for tax purposes. Broadly, the relevant tiers are: • tier one : small company limited by guarantee with annual revenue of less than $250,000, without DGR status; • tier two : company limited by guarantee with annual revenue of less than $250,000 and with DGR status; or company limited by guarantee with annual revenue of more than $250,000 and less than $1 million, with or without DGR status; and • tier three : company limited by guarantee with annual revenue of more than $1 million, with or without DGR status. Generally, if a company limited by guarantee is registered as a charity with the ACNC, it does not have to comply with several major obligations and requirements in the Corporations Act. Instead, these charities must comply with similar ACNC obligations and requirements (see ‘Charities’ reporting requirements’, below). For more information about ACNC reporting requirements, and the differences in reporting to ASIC, see www.acnc.gov.au/for-charities/manage- your-charity/other-regulators/companies-limited- guarantee. Companies limited by guarantee: fees From1 July 2023, the fee for incorporating a company limited by guarantee is $474. Companies limited by guarantee that are not registered as charities must pay other fees, including ASIC’s annual review fees. These fees range from $59 to $1440, depending on the company’s size and whether the company is registered as a not-for-profit special purpose company. For more information, see: • www.asic.gov.au/for-business/r unning-a- company/annual-statements; • www.asic.gov.au/for-business/registering-a- company/steps-to-register-a-company/special- purpose-companies; and • www /asic.gov.au/for-business/payments-fees- and-invoices/asic-fees/fees-for-commonly- lodged-documents/annual-review. The federal government has introduced the ASIC industry funding model. This introduced an annual levy payable by ASIC-regulated entities, including companies limited by guarantee (see www.asic.gov. au ). Charities registered with the ACNC are exempt from this levy. Companies limited by guarantee: the legal duties of directors Similar to office holders in an incorporated association, the directors (and, in some situations, other company office holders) of companies limited by guarantee have legal duties they need to understand and comply with. The Corporations Act contains defences and penalties in relation to these legal duties. For companies limited by guarantee that are registered charities, most of these duties are set out in ACNC governance standard 5 (see www.acnc.gov. au ), rather than in the Corporations Act. Companies limited by guarantee: when this structure can be preferable A company limited by guarantee can be a preferable option to an incorporated association or a co‑operative if your group thinks it might want to carry on business (regular activities) outside Victoria or intends on being a large organisation. For a comparison of an incorporated association and a company limited by guarantee, and tips about when to use which structure, see www.nfplaw.org.au/free- resources/getting-started/legal-structure. 4 Indigenous corporations Overview of Indigenous corporations Indigenous corporations incorporated under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (‘ CATSI Act ’) can be for-profit or not-