The most common legal structure for a not-for-profit group is the incorporated association. The merits include limited liability for members and the ability to buy or sell property and borrow money. Unincorporated associations are more flexible but liability is unlimited. A company limited by guarantee has higher compliance costs but can operate interstate. Co-operatives must fully conform to co-operative principles to be registered. Incorporated associations have obligations to the Registrar of Associations. A secretary must be appointed. Business activity may be conducted. An annual general meeting must be held. Minutes of meetings must be kept and financial reporting is mandatory. The Associations Incorporation Reform Act 2012 (Vic) has codified the duties of office holders and committee members. Tax must be paid on income unless tax-free status is granted or the association is a deductible gift recipient.

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Justice Connect

Introduction to community organisations

Last updated

1 July 2020

Often people want to form a group to pursue a common goal, such as assisting people who are experiencing hardship or forming a local netball club. Community organisations are important and most people will either be part of a community organisation or will have to deal with one.

It is important to understand both the basic operation and structure of community organisations, and the key legal requirements for running them.

This chapter does not contain comprehensive information about every form of community organisation. Nor does it set out the law as it relates to these organisations in detail. It contains an overview of the most common legal structures available to community organisations (and their advantages and disadvantages) and information about other general legal considerations to bear in mind when running a community organisation.

The content of this chapter is directed only to not-for-profit community organisations.

For more information on issues raised in this chapter, see ‘More information’ at the end of this chapter and the free resources on Justice Connect Not-for-profit Law’s website (www.nfplaw.org.au). Justice Connect is a community legal centre that has a specialist service, Not-for-profit Law, that helps
not-for-profit community groups.

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