Operating as an Incorporated Association

In setting up and running your project there are a number of organisational structures that lend themselves to specific legal structures. (Examples from Renew Newcastle are discussed here.)

For non-profit Empty Space projects, an 'incorporated association' may be a suitable NSW legal structure that allows opportunities for program offering and funding diversification. 

Before we look at the advantages of an incorporated association structure, a word of caution. When setting up as an incorporated association in a particular State or Territory your organisation can only operate in that jurisdiction. To expand beyond your home State or Territory requires registration under the Corporations Act at some ongoing expense. Nonetheless, Associated Incorporation will probably suit the majority of Empty Space projects that focus on specific precincts, suburbs or cities and there is a provision for an incorporated association to become registered under the Corporations Act so it can carry on business in other states or territories outside of its home jurisdiction without needing to register as a company.

Before starting your Empty Space project speak to an accountant who can take care of the documentation and processing. 

More information:

NSW Department of Fair Trading:

  • Business structures factsheets outline the most common business structures in NSW 
  • Cooperatives and associations factsheets provide details of structural requirements for incorporated associations under the NSW Associations Incorporation Act 2009.

'Business Structures and Governance: A Practical Guide for the Arts' book from the Arts Law Centre of Australia.

Australian Securities and Investments Commission's Registering not-for-profit or Charitable Organisations information sheet has advice on the differences between a company structure and an incorporated association.

A cheap website for processing your company structure is eCompanies. Otherwise, your accountant can make this arrangement on your behalf.

The main advantages of formalising your Empty Spaces organisation under the Associations Incorporation Act include:

Separate Legal Entity

 An incorporated association is a separate legal entity to its members, giving it a number of capabilities:

  • Liability is limited, provided management committee members follow accepted business and community standards;
  • The association has the capacity to enter into and enforce contracts, including generally the power to hold, acquire and deal with property in its own name;
  • The association can receive funds in its own right; and
  • The association can have perpetual succession - it continues regardless of changes in its membership.

Lower Administrative Costs

An incorporated association provides most of the benefits of being a company but at a lower cost.  Administrative costs of establishing an Incorporated Association are lower compared to incorporation under the Corporations Act 2001 as the structure is more simple and straightforward. However, there are some costs involved in ongoing reporting obligations.

Input from a lawyer may not be necessary to set up an Association, but they are likely to be able to identify avenues specific to your strategic plan. We recommend you seek assistance on a pro-bono basis from someone who specialises in these structures.

Lower Duties and Reporting Requirements

Generally the duties and reporting requirements imposed on incorporated associations are less onerous than for a company. However, as is the case under the Corporations Act 2001, persons vested with the management of affairs of an incorporated association will have certain duties and obligations. Disclosure and governance requirements of incorporated associations include:

  • holding annual general meetings
  • keeping accounting records
  • preparing a statement of accounts
  • auditing (which becomes more onerous as the gross receipts of the association increase)
  • lodging annual returns

Donor Tax Deduction

This will also allow you to take one further step and set yourself with a tax deductible gift status.  This status can achieved in the short-term by signing with the Register of Cultural Organisations which assists qualifying cultural bodies to attract support by enabling them to offer donors the incentive of a tax deduction. The Register aims to strengthen private sector support for the arts.