The proprietary limited company structure is generally not suited to charities. This is because charities must be not-for-profit and a proprietary limited company usually allows shareholders to receive private benefits.

Private benefits can be in the form of:

• dividends and through profits realised on the sale, transfer or forfeiture of shares
• receiving a distribution from the net assets of the company on winding up. ​

However, there are certain circumstances in which a proprietary limited company may be an acceptable structure for a charity. For example:

• when the sole member of the company is another registered charity
• when the company is a corporate trustee of a charitable trust.

If your company limited by guarantee is registered as a charity with the ACNC, you have ongoing obligations to the ACNC.

You do not have to report annually to ASIC or notify ASIC of certain changes. Generally, you should contact ASIC for anything relating to the company's corporate status and the ACNC for anything relating to your charitable status. See the table below for a summary of when to contact the ACNC or ASIC.

If your company stops being registered with the ACNC, you must comply with all ASIC requirements again.

For more information on when you must contact the ACNC or ASIC, see the table in the section 'When to contact ASIC or the ACNC' at the bottom of this page.

Meeting ASIC requirements

If your company is a registered charity, you need to contact ASIC when:

• you want to change the name of your company (including removing ‘Limited’ from the company name)
• your auditor resigns or is removed (in certain circumstances)
• an external administrator is appointed for your company, or
• you wind up or deregister your company.

The provisions in the Corporations Act relating to auditors still apply for charitable companies. This means that you may still be required to appoint an auditor, even if your charity is not required to have its reports audited or reviewed. You may also have to notify ASIC about certain events relating to auditors (for example, if an auditor resigns or is removed). Read ASIC’s guidance on appointing an auditor.

For more information, see ASIC’s guidance on charities registered with the ACNC.

Meeting ACNC requirements

If your company limited by guarantee is a registered charity, your charity has ongoing obligations to the ACNC to:

• keep your charity status, for example, by remaining not-for-profit and working towards your charitable purpose
• comply with governance requirements, including the ACNC Governance Standards and ACNC External Conduct Standards. Some of these are different from, and more flexible than, the requirements for companies under the Corporations Act 2001 (Cth) (the Corporations Act). One example is meeting requirements.
• submit an Annual Information Statement each year, and
• notify of changes to your charity’s:
  • company name (including removing ‘Limited’)
  • address for service
  • directors (who we call Responsible Persons), or
  • constitution (which we call a ‘governing document’).

Your company must have a company secretary, who may also be a director (responsible person). Even if your company secretary is not a responsible person, you may wish to include them as your charity’s ‘contact person’.

You can submit your Annual Information Statement and notify the ACNC of changes through the Charity Portal.

You also need to notify the ACNC if you want to:

• change your charity’s legal structure
• merge your charity with another charity
• wind up (close) your charity, or
• revoke your company’s registration as a charity, even if you want to continue to operate your company.

For more information, see our guidance on merging or winding up your charity and revoking your registration as a charity.

ACNC requirements that replace ASIC requirements

The following are the major requirements under the Corporations Act that companies that are registered charities do not have to comply with. You must comply with similar ACNC requirements instead.

Holding members’ meetings

You do not have to comply with the requirement to hold general meetings of members or annual general meetings under the Corporations Act.

Instead, you must comply with the requirements of ACNC Governance Standard 2, which requires your charity to be accountable to members. You may still have meetings to help your charity comply with Governance Standard 2.

Meeting civil statutory directors’ duties

You no longer need to comply with the civil directors’ duties under the Corporations Act.

Instead, you must comply with ACNC Governance Standard 5, which requires charities to make sure that their responsible persons meet similar duties to those under the Corporations Act.

However, the following requirements of the Corporations Act still apply to directors of companies that are registered charities:

• criminal offences relating to breaches of duties of good faith and acting for a proper purpose and misuse of position or information (under section 184 of the Corporations Act), and
• the duty to prevent insolvent trading (under section 588G of the Corporations Act) – this duty is also included under governance standard 5.

Reporting annually

For the 2013 reporting period (that is, from the financial year starting on or after 1 July 2012 but before 1 July 2013), your company was required to:

• submit an Annual Information Statement to the ACNC (without a financial report ), and
• send ASIC your financial reports, if your company is medium or large.

From the 2014 reporting period (that is, from the financial year starting on or after 1 July 2013), a company that is a registered charity only needs to submit an Annual Information Statement to the ACNC (with a financial report, if your charity is medium or large).

You do not have to report to ASIC. This means that you do not have to do the following things for ASIC:

• file an annual review
• provide financial reports
• pass a solvency resolution, or
• pay an annual review fee.

The parts of the Corporations Act that relate to financial reporting still apply to charities that issue debentures.

If you receive an annual return fee from ASIC and do not think that you need to pay it, you must contact ASIC and request the fee be withdrawn.

Keeping records

The ACNC requires all charities to keep financial records.

ASIC does not require companies that are registered with the ACNC to keep written financial records in accordance with the 'Financial Reports and Audit' requirements of the Corporations Act.

ACNC and ASIC requirements when changing your charity’s details

You must do the following things to meet ACNC and ASIC requirements when you change your charity’s name, address, directors or constitution.

To notify the ACNC of changes, you can contact us or log in to the ACNC Charity Portal.

For a quick guide to how to meet ASIC and ACNC requirements, see the table below on when to contact ASIC or the ACNC.

Changing your company name

To change the name of your company, your members must pass a special resolution to change its name and lodge a Form 205 – Notification of resolution with ASIC (lodgement fees apply).

Before starting this process, you may want to:

• check the ACNC register to see whether any other charity uses the proposed name
• check that the proposed company name is available by searching ASIC Connect, and
• reserve the proposed company name before you are ready to register the new name by lodging Form 410 – Application for reservation of a name (lodgement fees apply).

After ASIC changes the company name, you should also contact the ACNC to let us know about the change. After we confirm that your charity’s name has been changed on the ASIC register, we will change your charity’s name on the ACNC Register.

Removing ‘Limited’ from your company name

You do not need to use the word ‘Limited’ when you use your company name (such as on company letterhead, or on the company’s common seal) if:

• your company is a charity registered with the ACNC, and
• its constitution does not allow directors to be paid fees, and requires the directors to approve all other payments the company makes to directors.

The company's legal name (as registered with ASIC) will still include 'Limited' at the end of the name.

If you still want to change your legal name officially to have the word ‘Limited’ removed, you will need to apply to ASIC and pay a fee (see above re changing your company name).

Changing your company address

You must notify the ACNC of a change to your charity’s ‘address for service’, which will be published on the ACNC Register. You should provide your company’s registered office address as your address for service so that the ACNC can pass this information on to ASIC to update the ASIC register. The registered office address must be a physical address (not a PO box or email address).

We will send all correspondence (including legal documents) to your address for service. If you also provide an email address, we will use this as the main way to contact you.

You do not need to notify ASIC of a change of address (such as a registered office address, a principal place of business or officeholder’s residential address).

Changing your directors

You must notify the ACNC of the details of and changes to your company’s directors (who we call ‘responsible persons’).

You do not need to notify the ACNC about officeholders of your company who are not responsible persons, such as your company secretary or chief executive officer. However, you may wish to make your company secretary the ‘contact person’ for the ACNC, so that they can contact, and be contacted by, the ACNC.

You do not need to notify ASIC of any changes to the officeholders of your company.

Changing your constitution

To change your company’s constitution or adopt a new constitution, your members must pass a special resolution.

You must notify the ACNC of changes to your constitution (which we call a ‘governing document’).

You do not need to lodge a copy of the special resolution with ASIC.

The information you report to the ACNC will be available to the public on the ACNC Register, including information you submit in your Annual Information Statement and any changes you notify us of.

Because registered charities are not required to notify ASIC of most changes that have been notified to the ACNC, the ASIC Register may not be current for registered charities.

*Note that ‘small companies limited by guarantee’ under the Corporations Act may not have to submit a financial report.