The Australian Charities and Not-for-profits Commission (ACNC) has worked across the sector and government to develop a template constitution to assist small charitable companies limited by guarantee.
The new template constitution is designed to help small organisations with simple membership that are:
- a not-for-profit organisation that wants to incorporate as a company limited by guarantee and register as a charity with the ACNC
- an existing company limited by guarantee that that wishes to become a charity registered with the ACNC, or
- an existing company limited by guarantee that is a registered charity and wants to update its constitution.
The template constitution is supported by a detailed clause-by-clause guide, a quick checklist for completing the constitution and a table that sets out which sections in the Corporations Act 2001 (Cth) may be relevant to clauses in the template constitution.
ACNC Assistant Commissioner General Counsel, Murray Baird, said the new template constitution was the result of extensive consultation with the sector.
“This constitution and guidance has been developed in consultation with the ACNC’s advisory board, specialist professional and sector user groups and small charities focus groups,” Mr Baird said.
“By taking this approach, we have been able to publish simple clause-by-clause instructions on the template constitution, plus detailed guidance on relevant legislative provisions for professional advisors.
“We have also consulted closely with the Australian Taxation Office (ATO) and Australian Securities and Investments Commission (ASIC) to ensure it meets the legal requirements of both the Corporations Act and ACNC Act.”
The new template constitution and supporting materials, available at acnc.gov.au/clgconstitution, have been met with support from the sector.
Nathan MacDonald, Manager of Advice, Not-for-profit Law at Justice Connect confirmed that the template constitution is an extremely important resource for small charities, particularly those with limited access to professional help.
“The new template constitution removes a significant barrier for organisations considering becoming a charitable company, and provides an excellent precedent for an easy-to-use, contemporary set of rules that meets legal requirements.”
Judith Fox, National Director, Policy and Publishing at the Governance Institute of Australia stated that without access to a template constitution, it has often proved too difficult for charities to move away from the incorporated association model.
“The structure of a company limited by guarantee is best for charities operating nationally, given the variation in the state-based associations’ regimes,” Ms Fox said.
“The new resource from the ACNC is a boon to the charities sector, providing a much-needed template for making the transition. Moreover, it has been reviewed by the ATO and ASIC, providing confidence all round.
“This invaluable resource shows how greatly the ACNC continues to support the organisations it regulates — charities can now easily ensure that their structure facilitates their mission.”
Aaron Talbot, Chief Financial Officer at Nurse Teach Reach Inc., described the value of the template constitution from the perspective of a small charity.
“Support from the ACNC means that Nurse Teach Reach Inc. is able to focus its attention and monetary assets towards its charitable purpose and not on expensive professional fees,” Mr Talbot said.
“Being a start-up charity without the support of a major foundation or government grant, the ACNC, through the production of this document, has greatly assisted Nurse Teach Reach Inc. along its journey of Charitable Status registration and ATO Endorsement.
Charities of all types and sizes are encouraged to contact the ACNC if they need guidance and support. Charities can call 13 ACNC (13 22 62) or email firstname.lastname@example.org.