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The ACNC has released a Decision Impact Statement following the Administrative Appeal Tribunal’s decision on Angel Loop Ltd.

Angel Loop Ltd – an organisation that aims to connect angel groups with entrepreneurs and inventors to foster investment in innovation - applied to the ACNC for registration as a charity. It contended its work promoted a culture of innovation and entrepreneurship in Australia.

However, the ACNC refused the application on the grounds that the applicant in fact had an “independent, non-charitable purpose of facilitating private business relationships for the primary benefit of entrepreneurs and angel investors”.

Angel Loop Ltd appealed the ACNC’s decision to the Administrative Appeals Tribunal and the Tribunal upheld the ACNC’s decision.

The Tribunal drew a distinction between Angel Loop’s application and the case of Commissioner of Taxation v Triton Foundation (2005).

In the Triton case, the Federal Court had accepted that the promotion of a culture of innovation and entrepreneurship was capable of being a charitable purpose as an aspect of the promotion of industry or commerce.

The Tribunal however distinguished between Triton – where “all of the help was given to the inventor”, and Angel Loop – where it stated that “help is not only given to the inventor”.

The Tribunal found that Angel Loop’s purpose was to bring about a commercial deal between the investor and inventor, and then that this purpose – while “doubtless a worthy purpose” – was not incidental or ancillary to a charitable purpose, meaning Angel Loop was unable to be registered as a charity.

ACNC Commissioner Dr Gary Johns said: “The Tribunal’s comments about purposes that are incidental or ancillary to a charity’s main purpose will continue to guide our assessments of charities’ ongoing entitlement to registration, including compliance with ACNC Governance Standards.”

Read the full Decision Impact Statement.