Incorporated Association vs Company Limited By Guarantee

The majority of community broadcasting stations choose the structure of the Incorporated Association when establishing their organisation with a much smaller number preferring the company limited by guarantee model. Here you'll find information on both options.

Incorporated Associations

Incorporation is a voluntary, simple and inexpensive means of establishing a legal entity. It is an alternative to forming, for example, a company limited by a guarantee, or co-operative. It is particularly suitable for small, community-based groups such as community broadcasting organisations.

The legal structure will dictate duties and responsibilities on the Boards and Committees of the organisation and the station’s employees. Some of these duties and responsibilities will come from general law, while others will be set out in the various pieces of legislation which allow for incorporation.

Legislation differs in each state or territory, so it is difficult to outline detailed requirements, but basically an Incorporated Association may need to:

• have a committee, responsible for managing the association
• have a public officer and notify any changes in that position
• have a registered office in its state of incorporation
• act in accordance with its objects and rules
• hold an annual general meeting once every calendar year
• lodge an annual statement every year
• keep proper accounting records and, in some states, prepare, have audited and lodge financial statements
• keep minutes of all committee and general meetings.
• keep registers of members and all committee members
• have a common seal.

Further information regarding incorporated associations is available from the various relevant state bodies:

• ACT Government - Justice and Community Safety
• NSW Government Fair Trading
• Northern Territory Consumer Affairs
• Queensland Government - Incorporated Associations
• Government of South Australia Consumer and Business Services
• Tasmanian Government Consumer Affairs and Fair Trading
• Consumer Affairs Victoria
• Government of Western Australia - Department of Commerce

Companies Limited By Guarantee

Under a company structure, charitable or not-for-profit organisations will generally be registered as public companies that are limited by guarantee. Limited by guarantee means the liability of the company’s members is limited to the amount the members undertake to contribute to the property of the company if it is wound up.

Companies are registered under the Corporations Act 2001(Corporations Act), which is Commonwealth legislation administered by ASIC. A company’s registration is recognised Australia wide.

At the very least, a public company must:

• have at least three directors and one secretary
• have at least one member
• have a registered office address and principal place of business located in Australia
• have its registered office open and accessible to the public
• be internally managed by a constitution or replaceable rules
• maintain a register of its members
• keep a record of all directors’ and members; meeting minutes and resolutions
• appoint a registered company auditor within one month of its registration
• keep proper financial records
• prepare, have audited and lodge financial statements and reports after the end of every financial year (this requirement does not apply to some companies that are limited by guarantee
• send to its members a copy of its financial statements and reports, unless the member has a standing arrangement with the company not to receive them 
• hold an annual general meeting once every calendar year within five months after the end of its financial year
• receive and review an annual company statement and pay an annual review fee (a charitable or not-for-profit company may be eligible for a reduced annual review fee if it meets the criteria under the definition of ‘special purpose company’ in reg 3(a), (b), (c) or (d) of the Corporations (Review Fees) Regulations 2003, and
• lodge notices whenever changes to its officeholders, office addresses, constitution and its name occur within specified timeframes as determined by the Corporations Act 

A company is a small company limited by guarantee in a particular financial year if :

Further information regarding companiess limited by guarantee is available from ASIC - Australian Securities & Investments Commission.