Organisation types

Not-for-profit organisations

A not-for-profit organisation does not operate for the profit or personal gain if its individual members. Not-for-profits can make profit, but any profit made must be used to carry out the organisation's purposes and must not be distributed to owners, members or other private people.

Advantages

Some advantages of not-for-profit organisations:

  • shareholders or owners have no responsibility for the debts of the company unless they signed personal guarantees
  • companies can be owned and operated by one shareholder and director
  • directors, managers and employees have no personal responsibility for debts unless they caused the debts recklessly, negligently or fraudulently
  • operators can use titles like Managing Director, Chairman or Chairwoman
  • a company may operate in all states.

Disadvantages

Some disadvantages of not-for-profit organisations:

  • companies are expensive to establish
  • companies have higher compliance costs.

Registering a not-for-profit organisation

Registration of a company creates a legal entity separate from its members. Companies are registered under the Corporations Act 2001, which is Commonwealth legislation administered by the Australian Securities and Investments Commission (ASIC). A company's registration is recognised Australia wide and the company can hold property and can sue and be sued.

Further information on registering a NFP company and responsibilities of a NFP company is available on the ASIC website.


Related information

Other websites

Not-for-profit tax laws and concessions - Australian Taxation Office


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Page last updated 30 November 2016

Provided by:
Department for Communities and Social Inclusion
URL:
http://www.sa.gov.au/topics/family-and-community/community-organisations/types/not-for-profit-organisations
Last Updated:
30/11/16
Printed on:
22/07/17
Copyright statement:
SA.GOV.AU is licensed under a Creative Commons Attribution 3.0 Australia Licence. © Copyright 2016