Incorporation means that a not-for-profit or community group becomes a legal entity that's separate from its members. It provides protection to its members in legal transactions.
Consumer and Business Services (CBS) regulates incorporated associations in South Australia. This includes administering the Associations Incorporation Act 1985.
Not-for-profit and community groups that don't incorporate are known as unincorporated associations. CBS is not involved in their administration or management.
Benefits of incorporating your community group
Incorporating your association means:
- documents lodged are kept on a public register and can be requested
- the association can sue and be sued - giving some protection for individual members
- the association can enter and enforce contracts in its own name
- the association can apply for government grants
- the association can hold, acquire and deal with property in its own name
- the affairs are managed by a committee or board to fulfil the objectives of the association.
While incorporation has many benefits, it comes with rules that you must follow, including:
- maintaining meeting minutes
- maintaining proper financial records
- potential annual reporting obligations.
Powers of an incorporated association
An incorporated association may
- acquire, hold, deal with and dispose of any real or personal property
- administer property on trust
- open and operate ADI accounts
- invest its money
- in any security
- in any other matter authorised by the rules of the association
- borrow money
- give security for the discharge of liabilities incurred by the association
- appoint agents to transact any business
- enter into any contract it considers necessary or desirable.
These are subject to the Associations Incorporation Act 1985 and the associations' rules.
An incorporated association does not have the same powers as an individual person, or a separate legal entity, such as a company or a co-operative.
CBS will not accept rules that give an association the powers of a natural person, or powers listed within the Corporations Act 2001. If this is necessary for your association, you should seek independent legal advice to discuss alternative corporate structures.
Setting up an incorporated association
Incorporation is not compulsory and can only happen when your group meets certain requirements. See Starting an association.
You may want to seek independent legal advice on whether incorporation is appropriate for your group.
You can't register as an incorporated association if you plan to operate as a business or distribute profits or assets to members, unless they're reasonably paid for work done by the association.
Contact CBS Associations and Cooperatives
Email: associations@sa.gov.au
Phone: 131 882, choose option 7
You can also book an appointment with the Associations Team for further assistance.
