Benefits of incorporating an association
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Why should you incorporate an association?
While incorporating under the Associations Incorporation Act 2015 is voluntary incorporation offers groups some benefits including:
- members and officers of the association are generally not liable to contribute towards the payment of debts or liabilities of the association.
- once registered, the name of an incorporated association will be protected and ends with the word “Incorporated” or the abbreviation “Inc”.
An incorporated association can:
- enter into contracts;
- buy, own and sell property;
- open bank accounts;
- sue or be sued; and
- employ staff.
An incorporated association cannot:
- distribute profits to its members;
- distribute its assets amongst members upon winding up; or
- trade for the purpose of securing financial benefits for members.
The Act intends that incorporated groups will operate as not-for-profit organisations. This does not prevent the group from deriving income from its activities, however if the group’s main purpose is to trade or secure financial profits for its members, it is not eligible to be incorporated under the Act.
Have you considered all your options?
It is important to make an informed choice about the most appropriate legal structure for your organisation which can depend on the purpose, objectives, nature and management structure of the group. Incorporation of an association is one option available to a not for profit organisation.
Other structures include:
- a non-distributing co-operative under the Co-operatives Act 2009 – see our Co-operatives section for more information.
- a company under the Corporations Act 2001 – visit the Australian Securities and Investment Commission (ASIC).
- an Aboriginal Corporation under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 - visit the Office of the Registrar of Indigenous Corporations (ORIC).
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