Types of incorporated structures
There may be circumstances where it may be advantageous for the association to move to another jurisdiction. For example, an association wanting to expand its activities into other States may prefer to become a company, regulated by Commonwealth authorities.
The Act contains provisions that allow the Commissioner to facilitate a transfer to another jurisdiction for example:
- a co-operative;
- an Aboriginal or Torres Strait Islander corporation; and
- an incorporated company
Incorporation under the Corporations Act
An organisation wishing to operate for profit or conduct its activities anywhere in Australia can incorporate as an Australian company under the Corporations Act 2001. In general, companies have greater scope than incorporated associations in the activities that they can undertake however they are more highly regulated than other entities and can have higher ongoing costs. There are several types of company including:
- Unlimited company with share capital is often used for pooled investments and allows members to withdraw their investment capital. Members are personally liable for the debts of the company.
- Company limited by shares is often used for business purposes. Members' personal liability is limited to any unpaid subscription price for their shares.
- Public company limited by guarantee cannot issue shares. The liability of members is limited to the amount agreed to in a guarantee (e.g. membership fee).
For more information about companies contact ASIC on telephone 1300 300 630 or visit their website.
Registration as a co-operative
A co-operative is a legal entity created, owned and controlled by its members. Members benefit by sharing and using the co-operative's products and services. Co-operatives can be set up for a wide range of social and economic activities such as retail, agriculture, irrigation, marketing and taxi services.
There are different types of co-operatives to suit different business needs. A distributing co-operative has a share capital and may give returns or profits to members. A non-distributing co-operative may or may not have a share capital and cannot give any returns or profits to members (other than the nominal value of shares).
It may be decided the association is better suited to the structure of a co-operative and would operate more effectively if it transferred from being an incorporated association to a co-operative company. For further information please visit www.commerce.wa.gov.au/co-ops or contact Consumer Protection on 1300 30 40 74.
Incorporation under the Corporations (Aboriginal and Torres Strait Islander) Act
The Corporations (Aboriginal and Torres Strait Islander) Act (2006) provides a simple way for Aboriginal or Torres Strait Islander groups to incorporate.
Eligibility for membership must meet certain requirements relating to required numbers or percentages of Aboriginal or Torres Strait Islander persons . Unlike incorporated associations, Aboriginal or Torres Strait Islander corporations allow groups to share profits and engage in trading activities that incorporated associations are restricted from doing.
Assistance and advice on forming an Aboriginal or Torres Strait Islander corporation is available from the Office of the Registrar of Indigenous Corporations.