Quick tips: Changing your governing rules – incorporated charities

Following your charity’s rules is important… but they have to work for you. Sometimes it will be necessary to change your rules to support new ways of doing things or to improve your governance structures. Whatever the reason, making changes to your rules is a significant decision – there are some things to keep in mind when going through this process.

What to do

  • Work out what changes need to be made to your rules before you begin the process of making changes. If you’re going to make changes, it might be a good time to update your rules generally.
  • Check whether your rules and legislation that applies to your charity sets out requirements about how to make changes to your rules. For example, you may be required to provide 21 days notice to your members about a meeting at which a change to your rules is being considered.
  • Follow any other requirements of the legislation that applies to your charity such as completing and lodging any forms or other documents with the relevant regulator. There may be a fee for making any changes. Find out more from the regulator that incorporated your charity. If your charity is a company limited by guarantee this will be ASIC, if it is an incorporated association it will be your state or territory regulator.
  • Notify the ACNC if your rules change. There is no fee for this if you do this within the time period allowed. Read more about notifying the ACNC.
  • Changing your rules can be a simple task, especially if the changes are only minor, but sometimes even small changes can give rise to issues. Consider seeking professional advice before making changes to your rules.

What not to do

  • Be careful not to accidentally make a change that means your organisation is no longer entitled to registration as a charity. For example, if you change your charity’s purposes to include a non-charitable purpose, your organisation may no longer be entitled to be a registered charity. If in doubt, you should contact the ACNC with the new purposes you propose. Similarly, if you change the not-for-profit clause or the dissolution clause (this is the provision in your governing rules that sets out what happens if your charity dissolves or winds up) these may impact adversely on your charitable status.
  • Don’t leave rule changes too late and risk having to delay implementation of your charity’s plans. Your charity’s board and members will need time to discuss and agree on the change and the rules often set notice periods.

 

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