What is an incorporated association?
An incorporated association is a registered legal entity that's usually established for recreational, cultural or charitable purposes. It must have at least 5 members and put all profits back into the association's activities.
Incorporated associations are subject to the Associations Incorporation Reform Act 2012.
Benefits of incorporation
You can start an incorporated association for any legal purpose. This business structure is straightforward to start and operate and it doesn't cost much to register.
This structure offers many benefits to suitable organisations. 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.
Incorporating your club is not compulsory. If you do incorporate, there are rules you must follow.
How to register as an incorporated association
To incorporate your association:
- Hold a meeting with members to vote on whether your organisation wants to incorporate.
- You must get a majority of votes to authorise a person to incorporate the association and approve proposed rules that comply with the Associations Incorporation Reform Act 2012, or approve the adoption of model rules. This person must be at least 18 years old and live in Australia.
- 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.
- Register to incorporate with CAV.
Licences and permits for incorporated associations
Check the Australian Business Licence and Information Service (ABLIS) to find other local, state and federal licences, registrations and permits that you need for your business.
Other things to consider
Here are some things to consider before you register as an incorporated association:
Incorporated associations require an approved constitution with rules that cover matters such as:
- qualifications for membership
- quorums for meetings
- provisions for elections.
If all your members are Aboriginal, you might consider an incorporated Aboriginal corporation.
Profits and financial reporting
Incorporated associations are non-profit organisations. This means profits can't be distributed to members for personal gain, but must be used to achieve the objectives of the association.
The profits are also not subject to tax.
Many incorporated associations must lodge an annual financial statement to both the members and to CAV. CAV charges a fee for this.
Limited liability for members
Incorporated associations can own and fully control property. If the organisation is sued, members and officers of incorporated associations:
- are protected against personal responsibility for any debts or liabilities that the association incurs
- have personal liability limited to outstanding fees.
This is different to members or office-bearers of unincorporated associations, who can be sued or held personally liable for the debts of the organisation.
Receiving 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 get government funding because of the association's stable structure.
Making online transactions
CAV allows you to conduct many of the transactions related to incorporated associations online. For example, you can purchase an incorporated association extract with your credit card.