Are Special Purpose LBGs automatically registered with the ACNC?
Unfortunately, no. ACNC registration requirements can be somewhat complex. While our special purpose not-for-profit constitutions are suitable for registration with the ACNC, Patricia Holdings does not participate in the registration of your charity beyond registering it with ASIC.
What is Deductible Gift Recipient (DGR) endorsement?
To be eligible to apply for DGR endorsement you must, except in some very limited circumstances, first be registered as a charity with the ACNC.
Please note: Not all charities are eligible for DGR endorsement – i.e. you are not automatically granted DGR endorsement if you are registered as a charity.
To become endorsed as a DGR you must also meet the specific requirements set out for the particular category of DGR that you are seeking. Note there are approximately 50 different categories of DGR.
While each of our LBG constitutions have been prepared with the fundamental and common requirements for DGR endorsement, we strongly recommend that you seek professional advice about the exact requirements for the DGR category that best suits your purposes and activities before lodging a DGR application.
Can Directors of a registered charity be paid (in their capacity as Directors)?
Warning: While paying Directors in their capacity as Directors does not in and of itself prevent you from being registered as a charity, or even from receiving deductible gift recipient endorsement, it can result in other consequences. For example, requiring ministerial approval to obtain a charitable fundraising authority in NSW, loss of protection under the Civil Liability Act (or equivalent) and being treated differently for the purposes of work health and safety and superannuation laws. We recommend you seek professional advice if you are planning to pay directors in their capacity as directors.
Should my LBG be a special purpose not-for-profit?
If you will not be registering your company with the ACNC (and wish to be eligible for reduced annual ASIC fees) or if you would like to operate your LBG without the word ‘Limited’ or ‘Ltd’ in its name, you will have to meet the requirements set down for what is called a ‘special purpose company’. In the context of a charity, this means that your LBG will need to be established for charitable purposes and must contain wording in its constitution that prevents Directors from being paid in their capacity as Directors.
If you choose not to register as a charity, but still meet the ‘special purpose’ company requirements, then your annual renewal fee with ASIC will be reduced by around $1100.
So, if you do want to operate without the word ‘Limited’ or ‘Ltd’, or if you want to prevent payments to Directors for whatever reason, then our constitution entitled "Limited by Guarantee – special purpose not-for-profit" is the one for you.
If you do want to pay Directors then the constitution entitled "Limited by Guarantee- standard constitution" is for you.
Please note - if you want to operate without the word ‘Limited’ or ‘Ltd’ you must first incorporate your company, then register as a charity with the ACNC and then later apply to ASIC for removal.
Are there annual renewal fees for LBGs?
An LBG company that is registered as a charity with the ACNC does not have to pay any annual renewal fees to the Australian Securities and Investments Commission (ASIC).
If your LBG is not registered as a charity then it will need to pay an annual renewal fee. The amount of this fee will depend on whether or not it is a ‘special purpose’ company (see below for more detail).
Will the Patricia Holdings Limited By Guarantee Constitution allow me to register as a charity?
The constitutions that we provide when incorporating a Public Company Limited By Guarantee (LBG) are suitable if you wish to establish a not-for-profit organisation (NFP), including if you are thinking of registering your NFP as a charity with the Australian Charities and Not-for-profits Commission (ACNC).
Please note however that using any of our constitutions does not guarantee that your application for registration as a charity will be successful because there are a number of factors that the ACNC must consider beyond just your constitution. For more information on the requirements for registration as a charity you can visit the ACNC website at www.acnc.gov.au.
Does a Limited by Guarantee Company have Shareholders?
No, LBG Companies have members whose liability is limited to an amount that will be paid on the winding up of the company if the company’s assets are less than its liabilities. This is known as the Members Guarantee. There are no shares allotted thus no share certificates issued.
What do I need for a Limited By Guarantee Company?
A Limited by Guarantee Company must have at least three (3) directors (of which two (2) must reside in Australia), one (1) secretary (must reside in Australia) and one (1) member (can reside in Australia or overseas). It must also have a members guarantee amount and should have its objectives listed in its constitution.
What is a Limited by Guarantee Company (LBG)?
A Limited by Guarantee Company is usually a not-for-profit company, or a charity company.
LBGs are formed "on the principle of having the liability of its members limited to the respective amounts that the members undertake to contribute to the property of the company if it is wound up" - Corporations Act 2001 (Cth)
