- There are many reasons why a small charity may consider merging or winding up. When doing so, remember your legal obligations to regulators and fulfil them.
- There might be other obligations your charity has when merging or winding up – to staff, donors, members and those it owes money to.
- If you are changing your charity’s legal structure, you will likely need to inform the ACNC, and possibly other regulators.
- When the ACNC registers a charity, it also registers it under one or more charity subtypes. Subtypes reflect a charity’s purpose. If your purpose or focus area changes, you may have to change your subtype.
Charities can choose to voluntary wind up - if they feel they have finished their work or if they have reached the end of their useful existence. They can also be forced to wind up – if they are insolvent, for example.
When winding up, charities should:
- get professional advice
- follow their governing documents and all relevant legal obligations
- inform people (including donors, members, staff) that they are winding up
- remain solvent while they wind up
- cancel their registration with the ACNC.
The ACNC website contains more information about winding up.
And if you have wound up your registered charity, it will remain on the ACNC Register but will be marked as being no longer registered with the ACNC.
If your charity is merging, many of the points above will remain relevant. But instead of cancelling your ACNC registration, you should note that merging may affect your charity registration and any tax concessions you have.
In addition, you may have legal obligations to your incorporating regulator, the Australian Business Register (ABR), the Australian Taxation Office (ATO) and the ACNC.
The ACNC website contains more information about merging.
Changing legal structure
If your charity wishes to change its legal structure, you may need to:
- advise the ACNC of the change using Form 3B: Change of charity details
- change certain charity details on the Charity Portal
- apply to register a new charity, and/or
- apply to revoke the registration of – or deregister – an existing charity.
You might also need to notify relevant incorporating regulator(s) or register/cancel an Australian Business Number (ABN) with the ABR.
More on changing your charity’s legal structure can be found at the ACNC website.
Changing your subtype
Your charity subtype reflects your charitable purpose – ‘advancing health’, for example, or ‘advancing education’.
Your charity’s purpose is either the reason it was established, or what your charity’s activities aim to achieve. When the ACNC registers your charity it also registers it under one or more of these charity subtypes.
If you wish to change your subtype because it no longer reflects your current work, you will need to complete a request through the ACNC Charity Portal. Note that the ACNC will need to formally approve this request.
Also, if you are changing your charity’s purposes or activities, check that you allowed to do so under your governing documents.
If it is not you will need to change your governing documents (for example, by resolution at a meeting of members) and upload the new version in the Charity Portal.
More on changing your subtype can be found at the ACNC website.
Seeking legal advice
If required, your charity should seek out appropriate professional or legal advice when winding up, merging or changing its legal structure.