On this page
- What is an incorporated association?
- Key factors for choosing this structure
- Register as an incorporated association
Incorporated association explained
An incorporated association is a registered legal entity usually established for recreational, cultural or charitable purposes. It must have at least five members and all profits are put back into the association's activities. This structure offers many benefits to suitable organisations. Incorporation makes an association a legal entity and gives it a legal structure independent of its individual members, making it easier for the organisation to enter into contracts.
Incorporation allows your association to:
- continue regardless of changes to membership
- accept gifts, bequests and grants
- buy and sell property
- enter into enforceable contracts
- sue or be sued
- invest and borrow money.
An incorporated association can be established for any legal purpose. Registration is inexpensive and it's relatively easy to establish and operate – the profits are also not subject to tax.
Consumer Affairs Victoria, which regulates all incorporated associations, have information on whether your club should be incorporated.
However, profits cannot be distributed to members – they must be applied to the objectives of the association. There's an annual financial reporting requirement to both the members and to Consumer Affairs Victoria, which attracts a fee.
Key factors to consider
Consider the following if you decide to register as an incorporated association:
Incorporated associations require an approved constitution with rules covering matters such as qualifications for membership, quorums for meetings and provisions for elections. Incorporation provides benefits for members and officers, including:
- protection against personal responsibility for any debts or liabilities incurred by the association
- limiting of personal liability to outstanding fees.
If all your members are Aboriginal, you may like to consider an incorporated Aboriginal corporation.
Incorporated associations are non-profit organisations. Any profits made should be put back into the association and not provided as personal gain for its members.
Incorporated associations can own and fully control property. If the organisation is sued, the liability of club members for debts or damage is limited. Members or office-bearers of unincorporated associations on the other hand may be sued or held personally liable for the debts of the organisation.
Bequests, gifts and funding
An incorporated association can invest a bequest, or gift, given through a will. It can also borrow money and operate a bank account in its own name. It's sometimes easier for an incorporated association to obtain government funding due to the association's stable structure.
Consumer Affairs Victoria (CAV) allows you to conduct many of the transactions related to incorporated associations online, such as purchase an incorporated association extract using your credit card.
Incorporated associations are subject to the Associations Incorporation Reform Act 2012.
Register as an incorporated association
Hold a meeting with members to vote on whether your organisation wants to incorporate.
A majority of votes must be obtained to authorise a person, who is at least 18 years old and lives in Australia to incorporate the association and approve proposed rules that comply with the Associations Incorporation Reform Act 2012, or approve the adoption of model rules.
Ensure the proposed entity's name is not similar to CAV's Victorian names register, or identical to any listed in the ASIC organisations and business names register.