A charity's legal structure affects many things, such as its legal identity (whether it can be sued), its governance structure (who makes what types of decisions), who is liable for its debts and its specific responsibilities, such as what its reporting or other compliance obligations are.
The most commonly used incorporated legal structures for charities (and other not-for-profits) include:
- incorporated associations (the most common type) – the name will be something like ‘XYZ Incorporated’ or ‘XYZ Inc’
- companies limited by guarantee (the next most common structure) – for example, ‘XYZ Limited’ or “XYZ Ltd’
- non-trading co-operatives – the name must include the words ‘Cooperative’ and ‘Limited’ or ‘Ltd’, and
- Indigenous corporations – for example, ‘XYZ Aboriginal Corporation’.
Charities that are unincorporated could be trusts (for example, ‘XYZ Fund’, or ‘XYZ Foundation’) or an unincorporated association (a less formal structure, with no separate legal identity).