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  • Know your legal structure

    When setting up an NFP organisation, it is important to choose an appropriate legal structure as it will affect:

    • the way you hold meetings
    • the minimum number of members
    • reporting requirements
    • tax obligations
    • cost and other considerations.

    When choosing a structure, make sure you understand the responsibilities that go with that structure. Your legal structure will affect many things, such as its legal identity (whether it can be sued), its governance structure (who makes what types of decisions), where it operates, who is liable for its debts, and its specific responsibilities, such as what its reporting or other compliance obligations are.

    You may want to seek professional advice to help you to make an informed decision.

    You need to consider

    • Where will the NFP organisation operate?
    • Will there be a changing of membership?
    • What is the nature of the activities?
    • How will the organisation raise money?
    • What will be the size of your NFP organisation or charity and how complex will its activities be?
    • Will you have employees or volunteers?
    • What accountability will you have to your members and the community?

    Different types of NFP legal structures include:

    • Unincorporated association
    • Incorporated association
    • Company
    • Cooperative
    • Indigenous corporation
    • Trust

    See also:

    Last modified: 19 Jun 2017QC 52483