Incorporating a group
Take out the guesswork
Starting a group can be intimidating, especially all the legal aspects. With this guide we explain all the relevant information regarding incorporating a group.
Good risk management
Safety is paramount. Landcare groups are responsible for protecting members and participants, and for recognising and managing risks. It is essential that groups operate in a safe manner at all times as outlined in Running Safe Landcare Activities or by risk management guidelines provided by the land manager where you are working eg the Parks and Wildlife Service or the local council.
The aim of incorporation and insurance is to further minimise the risk to Landcare groups and their individual members of liability and legal action. Landcare Tasmania recommends that all Landcare groups have public liability and volunteer workers insurance cover. Some groups operate beneath an umbrella organisation (eg Wildcare Inc.). Others acquire their insurance and incorporation independently. This resource outlines the importance of insurance cover, and how to insure your Landcare group.
It is also essential that groups consider incorporating.
What is incorporation?
Incorporation is a voluntary, simple and inexpensive process that establishes your community group as a legal entity.
Incorporating allows your association to:
- continue regardless of changes to membership
- accept gifts and bequests
- buy and sell property
- enter into enforceable contracts
- sue or be sued
- apply for Government grants
Incorporated associations should be non-profit organisations. This means that any profits made should be used to further the objectives of the association, not provide personal gain for its members.
Incorporation limits the liability that may be brought against a Landcare group, to that of the group’s assets. Neither local, state or Commonwealth governments, or Landcare Tasmania is liable for any claims made against your group. Your group is entirely responsible for its actions and liabilities.
An unincorporated group or organisation has no separate legal identity from that of its members. It is simply a group of people who are doing the same thing together. If any actions are brought against the group, the courts need to place responsibility somewhere, and this responsibility is likely to be allocated to the committee. Without incorporation, individuals and their assets are exposed to legal risk.
Additionally, there can be difficulties opening bank accounts, acquiring insurance, and identifying who owns what property (eg tools and equipment) without incorporation. Many organisations will only fund incorporated organisations.
Incorporation is a choice. It is not a legal requirement but Landcare Tasmania recommends that all groups either incorporate or sit beneath an incorporated body. Incorporation improves group access to funding and reduces legal risks to members. The peace of mind in having the right protection for you and your members is worth it!
It’s not hard:
- Call a meeting of the members
- Decide who will fill the roles of the Committee (Secretary, Public Officer, President, Treasurer)
- Vote upon and approve the name of the association
- Approve the constitution/rules (associations are governed by a set of rules – you can create your own or adopt a set of Model Rules)
- Print, complete and lodge the Application for Incorporation form or complete the electronic form online
- Print, complete and lodge the Public Officer Particulars Form
- Lodge the forms together with the constitution/model rules and the incorporation fee
The fee to incorporate is a one-off amount paid when you initially incorporate. This increases after each financial year (1 July). In 2012 it was $140. Check current fees with Consumer Affairs and Fair Trading. (An additional fee is paid annually when your group lodges its Annual Return.)
Incorporation forms can be lodged electronically; by post to Consumer Affairs and Fair Trading, GPO Box 1244, Hobart TAS 7001; or in person at any Service Tasmania outlet.
Once the application has been approved a Certificate of Incorporation will be issued to signify that incorporation has been granted.
Model rules - Your constitution
The constitution is a set of rules or guidelines outlining how the association and its members should operate. The standard Model Rules can be adjusted to suit the requirements of your group and adopted as your constitution. The full set of Model Rules is a good reference but may be more detailed than you require. Or check out the simplified outline below.
Amendments and disputes
Amending an association’s constitution is done through the passing of a Special Resolution. The association must advertise its intent to make changes to its constitution and then hold a Special General Meeting to vote on the changes. If three quarters of the members present at the meeting vote in favour, the changes are passed.
The Public Officer is required to notify Consumer Affairs and Fair Trading of the amendments within one month by lodging a Notice of Special Resolution, and attaching a copy of the changes.
Members are expected to abide by the association’s constitution. Consumer Affairs and Fair Trading does not have the authority to investigate a breach of an association’s constitution, or any dispute that may arise between members. Any dispute or issues should be dealt with internally or by seeking independent legal advice.
The Public Officer
Every incorporated association is required to have a Public Officer who must be 18 years of age or older and a resident of Tasmania.
The Public Officer is the group’s official nominee on whom notice is required to be served in the legal sense. The Public Officer must keep the Office of Consumer Affairs and Fair Trading informed of the association’s constitutional changes and financial situation (via the Annual Returns).
Unless the rules of your group say otherwise, your committee is free to select whoever they think is best for the job. It may be a committee member, a member of your group or someone external to your group.
Incorporated groups must lodge an Annual Return with Consumer Affairs and Fair Trading within six months of the close of the association’s financial year. Your group may nominate any date to start its 12 month financial year. You may choose the standard financial year (1 July – 30 June) or you may decide another period (ie October 1 – Sept 30 or 1 April – 31 March). It’s up to your group.
An Annual Return is not required until the association has completed its first full financial year as an incorporated body. The return then needs to be lodged within six months of this financial year.
The Annual Return must contain:
- an income and expenditure statement
- a list of names and residential addresses of the committee members
- an Auditor’s Report confirming the accuracy of the income and expenditure statement
There is also an Annual Return fee which must be paid each year when the return is lodged. This increases each year on 1 July. In 2012 it was $56 (if lodged within six months of the end of the group’s elected financial year). Late fees apply. Check Consumer Affairs and Fair Trading for more information.
Incorporated groups must have their financial affairs audited by a person who is a registered company auditor or who is approved by Consumer Affairs and Fair Trading.
Maintaining good records (including receipts, invoices and funding contracts) is essential to keep costs down for your annual audit. It is best to work closely with your nominated auditor to clarify what records you will need to supply and how to present them for auditing.
Auditing costs can vary greatly – shop around for a competitive price or contact Landcare Tasmania regarding the pro bono auditors register.
Exemptions from auditing
An association can seek an exemption from auditing if:
• the association has total revenue in any financial year of $40,000 or less and total assets of $40,000 or less not including ‘real property’ such as land and real estate; and
• a three quarter majority of members have voted in favour of not having the association’s accounts audited.
If an association wishes to obtain an exemption from the audit requirement they should make a request with their next Annual Return. The request must include:
- a statement from the Public Officer that the association’s annual income does not exceed $40,000 and the association’s assets, excluding real property, do not exceed $40,000
- a statement from the Public Officer that a three quarter majority of members have voted in favour of the exemption
- an annual return signed by the Public Officer containing
- a statement of the association’s income and expenditure for that financial year
- a list of the names and residential addresses of the association’s committee for that financial year
- the lodgement fee
All applications for exemption will be considered and the association will be informed in writing of whether or not exemption is granted. Due to the changing finances of incorporated bodies, the exemption must be applied for after the end of each financial year. An incorporated association may fall outside the guidelines during a financial period and no longer be eligible for an exemption or may wish to undergo an audit periodically.
Landcare Tasmania Inc.
Landcare groups across Tasmania are invited to join Landcare Tasmania, the peak body that represents, strengthens, supports and grows Tasmania’s community Landcare movement to improve the health of our natural and working landscapes.
Landcare Tasmania supports member groups with information, insurance, planning, funding, and connecting them with volunteers, information and opportunities.
Join today. Annual membership is $30(inc GST). Member renewal is due on 1 January each year.
There are many benefits of membership including the Landcare Assistance Program (LAP). This funding provides support to Landcare Tasmania member groups for insurance and administration. If your group will be paying for its own insurance you can apply for $400. If you won’t be paying for your own insurance you can apply for $250. Previous LAP funding must be acquitted and groups must be a current member of Landcare Tasmania.
The LAP is supported by the Tasmanian State Government.
Other support available
Support may be available for Landcare groups through NRM professionals working at various levels of government, in NRM regional bodies, local experts and through other groups doing similar work across the state.
There are many events, training opportunities, field days and funding programs. Check the Landcare Tasmania monthly e-bulletin for updates. Apply for the LAP funding and look out for other grant programs from the Australian Government, NRM regions and philanthropic trusts to suit group projects.
For a who’s who with introductions to organisations, contact information and funding links, see Finding Support for Community Landcare.
Other Landcare Tasmania resources include:
Landcare Tasmania acknowledges the Tasmanian Community Fund for supporting the development of online Landcare resources.
Disclaimer – This information should be viewed as a guide only. It is not intended as a substitute for legal advice, nor is it an exhaustive statement of the subject matter. The following information may be subject to changes related to legislation or administration processes. While all care has been taken in the preparation of this material, no responsibility is accepted by the author for any errors, omissions or inaccuracies. No responsibility can be accepted by Landcare Tasmania Inc. for any consequences that may result from reliance on information provided in this publication. Links to other websites have been included for your convenience. Landcare Tasmania Inc. does not accept responsibility for information or services on other websites.