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Running a not-for-profit is a great way to contribute to your local community or a cause that means something to you. However, there are specific requirements in setting up a not-for-profit organisation that you should be familiar with from the beginning. Having a consultation with a specialist lawyer can save you money and legal issues in the long run. Let's take a look.
What's in this guide?
- What is not-for-profit consultation?
- Book a not-for-profit consultation
- When should I use not-for-profit consultation?
- What does not-for-profit consultation include?
- How effective is not-for-profit consultation?
- Do I need a lawyer for not-for-profit consultation?
- Setting up a not-for-profit
- More information on legal advice services
What is not-for-profit consultation?
A not-for-profit consultation is a type of specialised legal advice that's aimed at charities and other not-for-profit organisations, such as recreational clubs and community service organisations. There are many legal and regulatory issues that specifically apply to not-for-profits, such as charity tax concessions, legal structures, government and crowdfunding agreements and registration with the regulator.
Lawyers in the not-for-profit consultation industry are experienced in working with not-for-profits and can help you meet legal obligations and come up with cost-effective and practical solutions.
Book a not-for-profit consultation
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When should I use not-for-profit consultation?
It is a good idea to seek not-for-profit consultation if you are setting up an organisation, have legal issues while running your organisation or closing your organisation.
What does not-for-profit consultation include?
A not-for-profit consultation provides legal advice on areas such as funding, tax, organisational structure, dispute resolution, lease agreements and government agreements that are specific to non-profit and charitable organisations.
Some of the key areas of focus include:
- Regulatory compliance
- Governance and directors' duties
- Fundraising and sponsorships
- Tax deductible gifts/gift deductibility
How effective is not-for-profit consultation?
There are various legal requirements for not-for-profit organisations that you may not be aware of. A consultation from a lawyer with expertise in the not-for-profit industry is an effective way to ensure you have the information you need to get started and a point of contact to help you deal with any questions that may arise.
Do I need a lawyer for not-for-profit consultation?
While it is not strictly required to hire a lawyer to set up your not-for-profit, getting not-for-profit consultation from a lawyer can save you money and legal issues in the long run. They can advise you on the pros and cons of incorporating your organisation, what legal structure to choose and eligibility for registering your organisation as a charity.
In addition, there are many legal documents that you may need in order to ensure smooth running of your not-for-profit. These include whistleblower policy, employment agreements, volunteer agreements, federal and state funding agreements and many others. Lawyers can help you draft and review these documents so your not-for-profit is protected in case something goes wrong.
Setting up a not-for-profit
Once you have decided to set up a not-for-profit organisation, you need to make important decisions about whether you should incorporate your group and which legal structure to use. Your organisation's legal structure will affect its legal identity and whether you or other members can be sued, its governance structure and its responsibilities to government agencies.
The most commonly used legal structures for incorporated charities include:
- Incorporated associations
- Companies limited by guarantee
- Non-trading co-operatives
- Indigenous corporations.
For unincorporated charities, it could be a trust or an unincorporated association with no separate legal entity.
Lawyers can advise you on the right structure for your not-for-profit, depending on factors such as the purpose of your organisation, whether you want to pay your members or directors and who should be liable for any debts.
Lawyers can also advise you if you wish to register your not-for-profit as a charity with the Australian Charities and Not-for-profits Commission (ACNC). This will allow you to access charitable tax concessions, such as income tax exemptions, goods and services tax concessions and fringe benefits tax rebates. Lawyers can advise you on the eligibility requirements for registering as a charity and your obligations to ACNC once it is registered as a charity.
Running a not-for-profit
Running a not-for-profit organisation can throw up many legal issues. One common issue is complying with fundraising laws. Each state and territory has different fundraising laws. For example, in New South Wales you may have to apply for authority to fundraise if you intend to raise more than $15,000 per year. You may also need to consider whether certain fundraising activities meet the Australian Consumer Law. Not-for-profit consultation can help you figure out what fundraising laws apply to your organisation so you can plan your fundraising activities accordingly.
Closing a not-for-profit
Closing a not-for-profit organisation can be a complex process. There are different requirements for ending a not-for-profit, depending on your group's legal structure. For example, if you are running a registered charity and you wish to close it, you must distribute any surplus assets to a charity with similar purpose. It is a good idea to seek legal advice when closing your not-for-profit so you can take appropriate measures.
More information on legal advice services
Here's some more information on where to find free quotes and online legal resources:
- Sprintlaw. Sprintlaw is an online legal services firm that provides not-for-profit phone consultations. It charges a fixed fee, with packages starting at $350 plus GST.
- Lawpath. Lawpath provides free quotes for legal services including not-for-profit lawyers, so that you can compare and choose the right one for your needs and budget.
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