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Incorporation FAQs

Incorporation FAQs:

An important consideration in setting up a band is its choice of legal structure. In NSW, several structures are available for a not-for-profit community organisation – the most common among community bands is the incorporated association. Incorporation has several benefits over an unincorporated group, including having its own legal identity and organisational longevity.

Included here are a few of the critical items to consider in deciding whether or not to incorporate. Please note that these comments are general and do not represent advice – for specific questions and advice, bands should obtain professional advice.

An application to NSW Fair Trading needs to be submitted in the prescribed form and with payment of the applicable fee to become an incorporated association in NSW.

Bands will need to be aware of the following in applying:

The band should supply three proposed names for the association (excluding the word ‘Incorporated’;
The application fee is $176;
The band must ensure it has at least three committee members, and five members (including the three committee members);
If the band wishes to adopt its own constitution, it must attach a copy. Please note that it must address the required items outlined in the Model Constitution. It may instead choose to adopt the Model Constitution from NSW Fair Trading but please note that the constitution is an important document and must be adhered to;
It must nominate a public officer, who must reside in NSW.

Following incorporation, bands should consider:

Applying to the ATO for an Australian Business Number (ABN);
Opening a bank account;
Establish policies and procedures about the operation of the association;
Ensure procedures are in place for appropriate records to be kept (including financial records);
Adequate controls are in place for the association’s property (e.g., multiple signatories on the bank account);
Obtaining public liability and voluntary workers insurance.

Committee Members and obligations:

For officeholders (committee members) of the association, please ensure they are aware of their responsibilities and obligations. These include:

Ensuring that membership fees are received and recorded, that a register of members is maintained, and that the association has at least five members at all times;
The association provides proper notice to members and holds its Annual General Meeting within six months after the end of its financial year;
Any change of public officer is notified to NSW Fair Trading, in the approved form, within 28 days;
Following its AGM, the Annual Summary of Financial Affairs form must be submitted to NSW Fair Trading within one month (along with payment of the annual registration fee, which is currently $47);
Abiding by other requirements of the Associations Incorporation Act 2009 (NSW) and Associations Incorporation Regulations 2016 (NSW);
Fiduciary duties as an officeholder to members, and personal liability in limited circumstances.

Fundraising:

If an association wishes to raise funds in NSW, please note that a Charitable Fundraising Licence may be required, also available through application to NSW Fair Trading.

Depending on the type of organisation, it may be eligible for registration as a charity with the Australian Charities and Not for Profits Commission. Neither registration as a charity nor incorporation as a not-for-profit association means a band can receive tax-deductible donations (DGR) – this is a separate registration with the ATO. Bands should seek specific advice from a professional advisor.

Further information is available from NSW Fair Trading.