Constitution Template for Charities Limited by Guarantee

The Australian Charities and Not-for-profits Commission (ACNC) has developed a constitution template to assist small charitable companies limited by guarantee.

The new template is designed to help small organisations, with simple membership, that are:

• a Not for Profit organisation that wants to incorporate as a company limited by guarantee and register as a charity with the ACNC

• an existing company limited by guarantee that that wishes to become a charity registered with the ACNC, or

• an existing company limited by guarantee that is a registered charity and wants to update its constitution.

The ACNC says the template is supported by a detailed clause-by-clause guide, a quick checklist for completing the constitution and a table that sets out which sections in the Corporations Act 2001 (Cth) may be relevant to clauses in the template constitution.

ACNC Assistant Commissioner General Counsel, Murray Baird, said the new constiution template was the result of extensive consultation with the sector.

“This constitution and guidance has been developed in consultation with the ACNC’s advisory board, specialist professional and sector user groups and small charities focus groups,” Baird said.

“By taking this approach, we have been able to publish simple clause-by-clause instructions on the template constitution, plus detailed guidance on relevant legislative provisions for professional advisors.

“We have also consulted closely with the Australian Taxation Office and Australian Securities and Investments Commission to ensure it meets the legal requirements of both the Corporations Act and ACNC Act.”

Nathan MacDonald, Manager of Advice, Not-for-profit Law at Justice Connect said the template was an extremely important resource for small charities, particularly those with limited access to professional help.

“The new constitution template removes a significant barrier for organisations considering becoming a charitable company, and provides an excellent precedent for an easy-to-use, contemporary set of rules that meets legal requirements.”

Judith Fox, National Director of Policy and Publishing at the Governance Institute of Australia, said that without access to a template, it has often proved too difficult for charities to move away from the incorporated association model.

“The structure of a company limited by guarantee is best for charities operating nationally, given the variation in the state-based associations’ regimes,” Fox said.

“The new resource from the ACNC is a boon to the charities sector, providing a much-needed template for making the transition. Moreover, it has been reviewed by the ATO and ASIC, providing confidence all round.

“This invaluable resource shows how greatly the ACNC continues to support the organisations it regulates — charities can now easily ensure that their structure facilitates their mission.”

Aaron Talbot, Chief Financial Officer at Nurse Teach Reach Inc., described the value of the template from the perspective of a small charity.

“Support from the ACNC means that Nurse Teach Reach Inc.is able to focus its attention and monetary assets towards its charitable purpose and not on expensive professional fees,” Talbot said.

“Being a start-up charity without the support of a major foundation or Government grant, the ACNC, through the production of this document, has greatly assisted Nurse Teach Reach Inc. along its journey of Charitable Status registration and ATO Endorsement."

Charities can call 13 ACNC (13 22 62) or email advice@acnc.gov.au.