Anna Doughan
Principal Solicitor
Commercial and Succession Planning
Establishing a charity in Victoria involves several important steps to ensure compliance with legal and operational requirements. Below is a simplified guide to help you understand the key considerations:
Public Benefit and Charitable Purpose
To qualify as a charity, your organisation must serve a public benefit and align with recognised charitable purposes, such as relieving poverty, advancing education, or providing other community benefits.
Choosing a Legal Structure
Charities in Victoria can adopt different legal structures depending on their purpose, size, and operational needs. Common options include operating as a trust, an incorporated association, or a company limited by guarantee. Each structure requires a governing document, such as a trust deed or constitution, to outline the charity’s objectives and operational framework.
Size and Financial Thresholds
Charities are classified as small, medium, or large based on their annual revenue:
- Small charities: Revenue under $500,000.
- Medium charities: Revenue between $500,000 and $3 million.
- Large charities: Revenue over $3 million.
These classifications affect reporting obligations and governance requirements.
Specialist Legislation
If your charity falls under specific categories, such as trade unions, co-operatives, or indigenous organisations, additional legislative requirements may apply.
Operational Scope
Decide whether your charity will operate only in Victoria or across multiple states and territories. Local operations may only need to comply with state-based laws, while national operations must meet the requirements of the Corporations Act 2001 (Cth).
Governance and Reporting Standards
Charities must comply with governance and reporting standards set by the Australian Charities and Not-for-profits Commission (ACNC). Medium and large charities are required to prepare financial reports and disclose related party transactions.
Tax Concessions
Charities may be eligible for tax exemptions, such as income tax exemptions, and can apply for deductible gift recipient (DGR) status. DGR status allows your charity to receive tax-deductible donations, but it also imposes additional reporting and compliance obligations.
By addressing these factors, you can establish a strong foundation for your charity to operate effectively and comply with legal requirements in Victoria.
Is your charity set up for success?
Let’s talk about how to build or refine your structure to support sustainable growth. To find out more call our commercial team on (03) 5445 3333
