Incorporation for Community Groups
| Incorporation — (235 kb PDF) is a voluntary, simple and inexpensive means of establishing a legal entity. It is an alternative to forming, for example, a company limited by guarantee or a co-operative, and is particularly suitable for small, community based groups. Except as may be provided in the rules of the association, incorporation provides a limited liability for members. |  |
The Office for Consumer and Business Affairs (OCBA) administers Incorporation and is located at:
Ground Floor,
Chesser Building
91-97 Grenfell Street,
ADELAIDE
http://www.ocba.sa.gov.au (external link)
There are many benefits to becomming incorporated:
- The organisation becomes a 'corporate entity'. This allows the organisation to open bank accounts, enter contracts, obtain insurance and lease and own property.
- Incorporation — (235 kb PDF) offers protection for office holders from debts or liabilities incurred by the organisation as long as the organisation does not make a profit from its members.
- Members are not held personally liable if the organisation is sued.
- Most government departments will only fund incorporated organisations.
- Your volunteers will be protected from personal liability under the Volunteer Protection Act 2001.
Disadvantages:
- There is a fee to become Incorporated.
- There are also some legal requirements placed on Incorporated organisations. Some “prescribed” Incorporated Associations must submit an annual audited financial statement. Generally these are those with gross receipts over $200,000.
The responsibilities and liabilities of an Incorporated Organisation are set out under the Associations Incorporation Act 1985 (external link) and Regulations(external link). An association that has trading or profit making as its purpose is not able to incorporate under the Act.
Amendments to the Associations Incorporation Act –Passed!
In 2005, based on advice from the Volunteer Ministerial Advisory Group, amendments were recommended to the Associations Incorporation Act 1985 to bring the Act into line with the Corporations Act in regard to reliance on professional or expert advice.
By making these amendments it was hoped to make it easier for volunteer organisations to attract volunteers to board roles and also take on positions of responsibility without the fear of being sued.
It is pleasing to advise the amendments have been included in the Statutes Amendment (Justice Portfolio) Bill 2006 which was passed by the Legislative Council on 7th December 2006.
Following approval by Cabinet, Her Excellency the Governor in Executive Council issued a proclamation to bring the Statutes Amendment (Justice Portfolio) Act 2006 into operation on Thursday, 18 January 2007. A new Fact Sheet will be available shortly.
Copies of the Act and regulations are available from the Office of Consumer and Business Affairs (external link) 'business advice' section of their website has a range of valuable information on becoming Incorporated including the appropriate forms, fees etc.
Download our Incorporation Fact Sheet — (235 kb PDF) here.
