G'day it's Justin Hogg here from Right Source we are talking not for profits
and working through a series of four videos to help you set up your not-for-profit, we've just
finished the first video which was really talking about the planning and that overview in terms of
setting up your not-for-profit, this week we're going to talk through the process of registering
through the ACNC which is the Australian Charities and Not-for-profit Commission which is basically
the regulator for charities and not-for-profits in Australia, first of all let's dive in and talk
about what the ACNC is, so basically as I said it's the regulator so what does that mean? Well it
is the one where if you want to have a charity or registered charity in Australia you need to
register through the ACNC it also once you've registered make sure you continue to meet
obligations so it helps create that that bar that all charities play by and make sure that they are
doing the best for their purpose and for those who are donating to that charity,
the other thing the ACNC does which is pretty cool is it provides a public register of every charity
in Australia which is free so if you are looking for a charity or you want to make sure even if
you're looking to donate to a charity you can look them up on the ACNC, you can see their financials,
their purpose, who works for them, their history, and that can be very useful tool when setting up
your own charity, so for example if you are looking to set up a charity or not-for-profit
and you've got a particular purpose it's very good to go on to the ACNC,
look up their register of charities, and see if anyone else is doing the same thing you are,
or what you're looking to do, because that is one good to make sure in terms of your market research
in terms of competitors or people buying for the same space but there may be others who doing the
same thing you're looking to do in a different geographical location or a different way that
will then help give you information on how you can run your charity better and that that's really
powerful process the ACNC is there, it's really helping lift charities up and and do more so
very useful site and website. What I'll actually do is I'll include the ACNC website
in the comments below so you can look that up and and check out the resources there. When
you're looking to register on the ACNC there's a few a couple of must-haves that you have to
have in place before you can really start that process one, the first thing is you need to be
a not-for-profit, so you need to have a entity structure in place that is a not-for-profit
structure so whether that be and there's a couple options you can go through and
definitely get some advice in terms of this but you can either be an incorporated association,
you can be a company limited by guarantee or you can be a trust, there's another obviously some
other different permutations to this, probably the one that I'm most familiar with and I work
with the most is a company limited by guarantee but that's not to say that's the one for you this
is the one I tend to be working with most commonly at the moment. So you need to have that structure
in place because that structure is what defines you as a not-for-profit and it's the first step,
the next thing is you need to have a charitable charitable purpose and this is really looking
at your purpose is there for the greater good, for community at large, for the public at large,
so even though you might have a specific thing you're looking at you're not limiting it to or
your purpose isn't too limiting, so it actually is for the wider benefit of community, and the
last thing that you must have is that you can't be an individual, you can't be a political party
and you can't be a government entity, so that's something that's quite interesting I found is
when you are looking to be a charity you can't do it as a sole trader, you have to do it as a group
and I think that comes back to the fact that being a charity you're really talking about community.
So okay there you must have but let's go through a little bit more detail in terms of the
ACNC registration process and what what that means and what really you want to have prepared
when you start to do that process, now the first thing obviously having a legal entity created you
want to have an ABN it's an Australian Business Number, so you want to have it registered and
obviously with registering an ABN and that type of process you also want to have a responsible
person and an address so you want to know a point of contact that responsible person, who's
driving all this and making sure it's all done, and an address, so where's your point of contact,
now that might be where you're operating out of or it might just be your location where
your correspondence is going to for the time being you want to have that organised. The biggest piece
that you want organised is your Governing Document so when it's a company it's often talking about a
constitution and this is a really basically it's a cornerstone document for your not-for-profit so
this is something that you want to have worked on and done some work on before you come to the ACNC
registration process because this will take a bit of time to get together, what do you need in
your constitution? Now there's a lot of templates you can use the ACNC has a template constitution,
I would definitely recommend getting some professional assistance when you're
setting up your constitution to make sure that it's done in a way
that suits what you're trying to achieve at your organisation, how you want to run it, now some key
points you want to consider and that you need to include in your constitution for not-for-profit
which is different to a normal constitution for any other company you might set up.
The first thing you need to do and this comes back to the purpose is to
embed that purpose in your organisation you need to include your purpose in the constitution so in
our first video we talked about defining your purpose well this is where the the rubber hits
the road to a fair extent as you actually want to include that definition and your purpose in
your constitution and that then becomes embedded in your organisation, the next thing you also want
to include in your constitution comes back to that not-for-profit piece is that you want to include
written in your constitution what happens to profits from your organisation so
that means that you want to make sure that any profits that you have in your organisation
don't get distributed to members they actually go back into the organisation and that's encapsulated
in your constitution. That also goes to what happens if the company winds up so
if a company winds up and this comes back to some of the registration processes you need
for the ATO as well is that you want to make sure that there's a clause in there that says:
I'm winding up that any leftover assets go to another charity of a similar purpose
and the wording around that is quite important to get right to make sure that you can register
one of the ACNC but also if you're looking to do your registration processes through the ATO that
it's done in a way that meets the requirements there, so that's why the professional help
around your constitution can be very important. So the rest of the constitution is then about
how you want to run your organisation and setting the rules up for that so it goes through things
defining what the powers of the board are so what can the directors of the organisation do,
how do you become a director? Now a director is often voted in by members. Okay well how do you
become a member? Now a member effectively is the the people you're running the organisation for
simplistically, so the rules around becoming a member and what your rights are as members and
what you can and can't do in terms of running the organisation, it also talks through then
about how meetings should be run how things are communicated potentially even talking about things
about if there's a conflict of interest, how that should be managed, so all those type of things are
encapsulated in your constitution and really work through how your organisation is going to work so
understanding I suppose the planning pro process on how you want your organisation
to work is important when you come to do your constitution, to make sure that when you set
that up it's consistent with how you want to run your organisation. Once you finish the
registration process and hopefully successful registering with the ACNC and you're registered
not for profit doesn't quite end there, you then have ongoing obligations that you need
to meet to maintain your charity status and maintain the registration with the ACNC.
One of those, there's really two parts to it, is firstly is the financial reporting
or annual reporting to the ACNC which is quite often a financial report depending on the size
of your not-for-profit depends on the rigor that might go around that financial report but there
is an obligation to keep financial records and to be able to report that to the ACNC.
You also will have to do an annual report to the ACNC which is basically a summary of
where you're operating, what you're doing, how you've gone achieving that, and
those two documents go in the ACNC and then public documents so anyone can look those up to see how
you're going and how your charities being managed. And the second part of that ongoing maintenance is
maintaining good governance standards now the ACNC has a set of standards it requires all
registered charities to maintain and that's part of the ongoing requirement of having charities
to live up to those standards, that's a bit of detail and we're going to go through that in the
next video so stay tuned to next week and we'll go through that in a bit of detail in terms of
your good governance guide and maintaining your board and the standards that and what that
requires for you as your organisation. And really that's it, so that's that's the ACNC registration
process, again, happy to to answer any questions that anyone might have in terms of if they're
going through that process currently, chuck them in the comments below because they may be the same
questions others might have when they're looking to set up the not-for-profit and also feel free to
subscribe, we've got lots of other videos on the channel at the moment looking at not-for-profit
and obviously we're doing the series of four and helping you set up your not-for-profit so
subscribing allows you to make sure you keep up to date with the videos we post every week on a
Wednesday, any other questions feel free to look me up on LinkedIn just send me a direct message
happy to help but if there's nothing else, thank you again for watching and taking the time to
to watch this video, I'll talk to you next week, it's Justin from Right Source.