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  • Public ancillary funds

    What is a 'fund'?

    A fund is a pool of money or property that is managed or held to make distributions to other entities. A fund does not deliver services.

    What must be in the fund's governing rules?

    Objects of the fund

    The rules must clearly set out and reflect the objects of your fund.

    Receipts

    The rules must reflect that receipts need to be issued in the name of your fund.

    Invitation to the general public to contribute

    The rules must reflect that the public must be invited to contribute.

    Non-profit basis

    The rules must clearly set out and reflect your fund's non-profit status.

    Prohibit from indemnity

    The rules must prohibit your fund from indemnifying the trustee, or an employee, officer or agent of the trustee, for a loss attributable to their:

    • dishonesty
    • gross negligence
    • recklessness
    • deliberate act
    • omission.

    Responsible person

    The rules must reflect that the majority of individuals, who are one of the following, must have a degree of responsibility to the community:

    • a trustee
    • a member of any committee or other controlling body of the fund
    • a director of a trustee.

    This is generally called a 'responsible person'.

    On winding-up, ceasing to be a public AF or revocation of DGR endorsement

    The rules must require the trustee to transfer the following surplus to an eligible DGR, on whichever is the earliest of the winding-up of the trust, it ceasing to be a public AF, or revocation of its DGR endorsement:

    • gifts and deductible contributions made to the fund for its principal purpose
    • any money received by the fund because of such gifts and contributions.

    What is a constitutional corporation?

    A constitutional corporation is either:

    • a corporation to which paragraph 51(xx) of the Australian Constitution applies
    • a body corporate that is incorporated in a territory.

    A constitutional corporation would usually be registered with the Australian Securities & Investments Commission and have an Australian Company Number.

    Less frequently, it may be incorporated under associations' incorporation legislation in a state or territory and have an association or incorporation number.

    See also:

      Last modified: 12 Oct 2016QC 25252