If you are involved in a not-for-profit organisation, or you are looking at setting up a not-for-profit organisation, it is important that you are aware of the legal obligations that the organisation may be subject to. The initial setup of your not-for-profit organisation is important, as this can often determine the way the organisation is regulated and determine the level of legal liability the organisation may have if a dispute were to arise.
What is a not-for-profit organisation?
Generally speaking, there are features that can identify what constitutes and what does not constitute a not-for-profit organisation. The main features of a not-for-profit organisation can include:
- Generally, profit or surplus is not distributed to shareholders or members, with the surplus to be reinvested back into the organisation;
- Where a not-for-profit organisation is wound up, the assets and remaining funds are to be distributed in accordance with the organisations aims or the assets are to be distributed to organisations of a similar nature;
- There is an involvement of volunteers in the organisation. In Australia, most not-for-profit organisations rely on volunteers to assist in the running of the organisation;
- Many not-for-profit organisations can have complex financial arrangements, often relying on a number of funding sources such as membership fees, donations from public and private organisations, sponsorships and government funding;
- The organisation has a set of rules or constitution; and
- Under certain circumstances a not-for-profit organisation may not be subject to government control albeit that it may receive government funding or support.
If you are considering setting up a not-for-profit organisation, we recommend you speak with one of our charity and not-for-profit lawyers. Navado Lawyers and Solicitors is a Sydney law firm servicing not for profit organisations across the Sydney area in a wide variety of legal areas including not for profit law, commercial law, workplace and employment relations and dispute resolution. Navado has been provided legal advice for organisations in the not for profit sector for over a decade and we have the knowledge and experience to provide you with relevant legal advice for your not for profit organisation. If you would like to speak to us about your not for profit organisation, you can contact our head office and arrange an appointment to meet with us in our Sydney CBD office.
This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.
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