When two or more charities choose to join as one organisation or group, this is called merging or amalgamating.
Merging with another organisation is different to winding up your charity. It is also different to charities working together but staying legally separate, or charities reporting to the ACNC as a group.
This page tells you:
- why a charity may choose to merge
- what is involved in merging
- things you need to know about merging, and
- the things you must notify the ACNC of when you are merging your charity.
Why a charity may choose to merge
Charities may choose to merge because they:
- think that it would benefit the groups of people they help
- have the same or similar purposes, cultures and values
- conduct the same or similar activities
- already work together
- want to share resources and funding, or
- think that they would be more effective if they worked together.
What is involved in merging
In order to merge, both charities will need to agree to merge. The way that a charity does this may be affected by its governing document and any relevant legislation (such as its incorporating legislation). For example, the charity may need to agree to merge by its members passing a special resolution at a general meeting. The charities will need to agree with each other on how the new legal entity will operate. This includes things such as whether to move into one office, how to manage your finances and how employees will be affected. You will then need to go through the process of merging your charity.
Things you need to know when merging
Merging can be a complicated process. The following issues are relevant to merging.
You may need to get professional advice when deciding whether to merge your charity with another charity or to help you merge, especially if you have employees, valuable property or contracts.
The organisation or organisations you are merging with
Before deciding whether to merge, you need to know things about the organisation you plan to merge with, such as its legal structure and whether or not it is a charity or other not-for-profit organisation. This will affect whether you decide to merge and the process you must follow if you do merge.
If you decide to merge, you may wish to set up a committee with representatives from the merging charities to manage the process and keep your charity’s governing body informed.
If you are setting up a new charity when merging, you should do that before winding up your old charity.
You cannot merge your charity with an organisation that is not a registered charity or is a for-profit business – this may breach the ACNC Act and the ACNC Governance Standards for charities. If you have questions about whether you can merge with a certain organisation, contact us.
Your incorporating regulator
If your charity is incorporated (for example, it is an incorporated association or company limited by guarantee), the process for merging depends on the incorporating regulator for your charity and the charity you are merging with.
Each incorporating regulator has different processes, forms and other legal requirements. When you decide to merge, you need to visit your incorporating regulator’s website or contact them. You may need to submit forms or information for any new incorporated organisation and the existing incorporated organisations which are continuing or are being wound up.
To find your incorporating regulator, see our list of regulators that may affect charities.
Governing documents and legal requirements
You must follow your governing document (such as your constitution or rules of association) and all legal requirements when merging.
Your governing document may tell you the process you need to follow to agree to merge. For example, you may need a certain majority of members to pass a special resolution at a general meeting. The organisation or organisations you are merging with may have requirements in their own governing documents.
There may also be legal requirements before, during and after you merge your charity. For example, you may need to:
- submit forms to certain Commonwealth, State or Territory regulators during the process
- comply with legal obligations to your employees, and
- comply with requirements under any contracts, lease or other legal agreements.
Telling people your charity is merging
You may need to notify other regulators that your charity is merging and changing its arrangements (for example, the Australian Taxation Office).
You may also need to tell your landlord, electricity supplier, anyone else that you have contracts or arrangements with, members, volunteers, employees, clients, donors and maybe the local community and the public.
Changes to your ABN (Australian Business Register)
When you merge your charity, you may need to contact the Australian Business Register to:
- cancel your charity’s ABN and/or the other merging charity’s ABN, and/or
- apply for a new ABN through the Australian Business Register.
You may need professional advice before changing your charity’s ABN, as it may affect your ACNC registration and any tax concessions you have.
Tax concessions (ATO)
Merging may affect your charity's access to certain tax concessions. If your charity has tax concessions and you keep your ABN after merging, your entitlement to tax concessions must be reassessed by the ATO.
You may need professional advice if you wish to keep or apply for tax concessions. The ATO will decide whether your charity is eligible for tax concessions.
If your charity does not have tax concessions but wants to apply for them, see our guidance on charity tax concessions available.
Notifying the ACNC
When you merge your charity, you may change its:
- legal structure
- charitable purposes
- governing document
- Responsible People, and
- Address For Service.
You will need to cancel your charity’s registration with the ACNC and apply to register the new charity if you change your charity’s ABN. You may need to get a new ABN if you change your charity’s legal structure.
Before applying to cancel your charity’s registration, you must submit your most recent Annual Information Statement. If you don’t do this, you must explain why it is not necessary when you apply to cancel your registration.
If your charity changes its charitable purposes or activities when it merges, your entitlement to registration as a charity, or as a charity with a particular subtype will be reassessed by the ACNC. You should contact the ACNC to organise this. You will also need to notify the ACNC of changes to your charity’s:
- governing document
- Responsible People, and
- Address For Service.
You can do this by logging into the ACNC Charity Portal.
To find out more about what you need to do to comply with your obligations to the ACNC before you merge your charity, contact us.