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Starting a Not-for-Profit in Australia: A Comprehensive Guide from a chartered accountant

Starting a not-for-profit (NFP) organisation in Australia is an important step for those wanting to do good work in the not-for-profit space. However, it's not without its complexities. From legal structures to tax concessions, there are several steps to consider.

As experts in accounting and tax planning, we often come across clients who would like to take the step in creating as NFP, however are not sure where to start. Our role is to guide our clients through this intricate process. If you are looking to start a not-for-profit in Australia but don't know where to start, we have created a comprehensive guide here that provides insight into the process before you are ready to jump in and create change in the community.

Starting a not-for-profit in australia to raise funds

We have also included some questions to ask yourself through this process. As an exercise, take down your responses and thoughts as a way to prepare yourself for when the time comes that you are ready. It also works as a good to-do-list.

Step 1: Define Your Purpose and Objectives for starting a not-for-profit

A clear mission and set of objectives are the backbone of any successful NFP. This will not only guide your actions but also help you choose the most suitable legal structure.

  • What is the primary mission of your NFP?

  • What objectives do you aim to achieve?

Step 2: Choose a Legal Structure

The legal structure you choose will have implications for how you operate, both legally and financially. Common structures include incorporated associations, companies limited by guarantee, and trusts.

  • Do you plan to operate nationally or just within a specific state?

  • Do you have a preference for a specific legal structure?

Step 3: Develop a Constitution or Rules

A well-drafted constitution or set of rules is mandatory and must comply with relevant legislation.

  • Have you drafted or considered the constitution or rules for your NFP?

Step 4: Assemble a Committee or Board

A strong, skilled board or committee is crucial for the effective governance of your NFP.

  • Have you identified potential board or committee members?

  • What skills are you looking for in your board members?

STEP 5: Register with the ACNC

If your not-for-profit is a charity, registration with the Australian Charities and Not-for-profits Commission (ACNC) is essential. This provides various benefits, including access to charity tax concessions.

  • Have you determined if your NFP qualifies as a charity?

  • Are you prepared with the necessary documentation for ACNC registration?

Step 6: Register Your Organisation

You'll need to register your NFP with either the Australian Securities and Investments Commission (ASIC) or the relevant state-based authority.

  • What is your timeline for registration?

Step 7: Apply for an Australian Business Number (ABN)

An ABN is essential for any organisation operating in Australia.

  • Have you applied for an ABN yet?

Step 8: Open a Bank Account

A dedicated bank account in the name of the organisation is a must for managing finances effectively.

  • Do you have the necessary documentation to open a bank account?

Step 9: Register for Tax Concessions

NFP's may be eligible for various tax concessions, including income tax exemptions and GST concessions.

  • Are you aware of the tax concessions available to NFPs?

Step 10: Fundraising and Compliance

If fundraising is part of your strategy, you'll need to comply with state-based regulations and may require a license.

  • Do you plan to engage in fundraising activities?

  • Are you aware of the licensing requirements?

Step 11: Ongoing Reporting and Governance

Depending on your legal structure, you may have ongoing reporting obligations and will need to maintain good governance practices.

  • Do you have a plan for ensuring ongoing compliance with legal and financial regulations?

Starting a not-for-profit in Australia is a rewarding but complex process. With the right planning and guidance, you can lay a strong foundation for your organisation's success. For personalised advice tailored to your specific needs, don't hesitate to reach out to us at Tier Accounting, where you can speak to a friendly and knowledgeable expert chartered accountant to guide you through the process.


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