Guide to Applying for ACNC Charity Registration

Introduction

Registering as a charity with the Australian Charities and Not-for-profits Commission (ACNC) is a significant step for many not-for-profit organisations in Australia. This registration formally recognises an organisation as a charity under federal law and is often necessary to access specific tax concessions and enhance public trust.

Completing the charity registration process requires careful preparation and a clear understanding of the eligibility criteria and application requirements. This guide provides essential information to help your organisation prepare and submit its registration application to the ACNC, covering the key steps from eligibility checks to understanding the post-submission process.

Eligibility Check Before You Apply

Understanding the Definition of a Charity

Before you start the registration application process, it’s crucial to determine if your organisation meets the legal definition of a charity. Under the Charities Act 2013 (Cth), an entity must satisfy several key criteria to be eligible for registration with the ACNC.

Your organisation must be strictly not-for-profit. This means any surplus income or assets must be used solely to advance the organisation’s charitable purposes. Profits cannot be distributed to members, owners, or other private individuals, either during operation or upon winding up.

Your governing document, such as a constitution or rules, must contain specific clauses demonstrating this commitment. Consider these examples of suitable clauses:

• Not-for-profit clause: The assets and income of the organisation shall be applied solely to further its objects and no portion shall be distributed directly or indirectly to the members of the organisation except as genuine compensation for services rendered or expenses incurred on behalf of the organisation.
• Winding up clause: If, upon the winding up or dissolution of the company after the satisfaction of all its debts and liabilities, there remains any property, this property must not be paid to or distributed among the members. Instead, this property must be given or transferred to some other organisation or organisations which is charitable at law…

Additionally, your organisation must have exclusively charitable purposes that are for the public benefit. The Charities Act 2013 (Cth) outlines various recognised charitable purposes, including:

• Advancing health, education, social or public welfare, religion, or culture
• Promoting reconciliation, mutual respect, and tolerance
• Promoting or protecting human rights
• Advancing the security or safety of Australia or the public
• Preventing or relieving the suffering of animals
• Advancing the natural environment

Purposes that are merely incidental or ancillary to achieving these main charitable aims are acceptable. However, the core mission must be charitable.

Finally, these charitable purposes must serve the public benefit. This generally means the benefit must be available to the general public or a sufficient section of it.

Some purposes, like relieving poverty or advancing education or religion, are presumed to be for the public benefit unless proven otherwise. For instance, a health service aimed specifically at Aboriginal Australians would likely meet the public benefit test, even though it targets a specific group because that group represents a sufficient section of the public.

Entities That Cannot Be Registered

Certain types of entities and purposes automatically disqualify an organisation from ACNC charity registration. It’s important to ensure your organisation does not fall into these categories before you apply.

The following entities cannot be registered as charities:

• An individual person
• A registered political party
• A government entity (part of an Australian or foreign government or one of its agencies)

Furthermore, an organisation cannot be registered if it has a ‘disqualifying purpose’. These include:

• Engaging in, or promoting, activities that are unlawful or contrary to public policy (such as terrorism or other criminal activities)
• Promoting or opposing a political party or candidate for political office

It is permissible for an organisation to distribute information or advance debate about the policies of political parties or candidates, provided this activity supports one of the recognised charitable purposes. However, directly promoting or opposing a party or candidate is a disqualifying purpose.

Additionally, to be eligible for registration, your organisation must have an active Australian Business Number (ABN). The entity type associated with the ABN must also align with your organisation’s legal structure.

Preparing Your ACNC Registration Application

Essential Information Checklist for Your Organisation

Before starting your ACNC charity registration application, it is crucial to gather all necessary details. Having this information ready will streamline the process and help avoid delays.

The ACNC provides a helpful registration application checklist and guide outlining what you need. Key information required includes:

• Organisation Information: Your active ABN, organisation name, and contact details. Remember that your ABN must have an entity type consistent with your organisation’s legal structure; you cannot apply with an inactive ABN or one with an ineligible entity type like ‘individual/sole trader’.
• Legal Structure: You must identify your specific legal structure, such as an incorporated association, company limited by guarantee, trust, or other form. This must match the entity type linked to your ABN, as inconsistencies will prevent application completion until corrected via the Australian Business Register (ABR).
• Responsible People Details: Full information for all individuals governing the charity, including:
  • Full name
  • Date of birth
  • Position
  • Contact details
  • Confirmation of eligibility (not disqualified by ACNC or the Australian Securities and Investments Commission (ASIC))
• Activities: A description of your organisation’s current and planned activities for the next 12 months, explaining:
  • How they further your charitable purpose
  • Who the beneficiaries are
• Financial Information: You’ll need to provide:
  • An estimate of your organisation’s revenue for the current financial year
  • A description of revenue sources
  • Your financial year-end date

Preparing these details thoroughly using the checklist and guide ensures you are ready to apply for charity registration.

Gathering Necessary Documentation

Alongside the essential information, certain documents must be prepared and submitted with your ACNC registration application.

Key documents include:

• Governing Document: This foundational document outlines your organisation’s structure and purpose. It must be:
  • Complete and current
  • Contain appropriate not-for-profit and winding-up clauses
  • May be in the form of a constitution, rules, articles of association, or trust deed
• Financial Reports (for backdating): If requesting your charity registration be backdated (to the date established, ABN activation, or 3 December 2012, whichever is latest), you must provide financial reports for each year from the requested registration date.
• Previous Governing Documents (for backdating): If your governing document has changed since the requested backdated registration date, you must also upload copies of the previous versions.

Ensuring these documents are complete and accurate is vital for a successful registration application. You can also upload supplementary documents like strategic plans if you wish the ACNC to consider them.

Completing the Online Application Process

Accessing and Using the ACNC Charity Portal

To begin your charity registration application, you first need to access the ACNC Charity Portal. You can:

• Log in using an existing account, or
• Create a new one if you haven’t used the portal before

The ACNC provides instructions to assist with account creation if needed.

Once logged into the portal, locate and select the option ‘Apply to register a new charity’. Before proceeding with the form, it is highly recommended that you review the ACNC’s registration checklist and guide. This preparation helps ensure you have all necessary information ready to complete the registration application smoothly.

Importantly, the ACNC does not charge any fees to apply for or maintain charity registration.

Overview of the Application Form Sections

The online registration application form is structured into several key sections. Completing these sections thoroughly is crucial for a successful application. You will need to provide comprehensive details about your organisation.

Key areas covered in the application include:

• Organisation Information: This includes your ABN, legal name, and contact details.
• Legal Structure: Details about how your organisation is legally formed.
• Governing Document: You will need to upload your organisation’s constitution, rules, or trust deed.
• Responsible People: Information about your board or committee members.
• Dates: Your organisation’s establishment date and the requested registration date.
• Operations: Details on operating locations and activities, including any overseas operations or fundraising.
• Charity Subtypes: Selecting the categories that reflect your charitable purposes.
• Finances and Governance: Providing financial estimates and demonstrating compliance with governance standards.
• Tax Status: Applying for Commonwealth tax concessions and Deductible Gift Recipient (DGR) endorsement, if applicable.

The application allows for uploading supporting documents. You may find that some questions are specific to certain types of charities and may not apply to your organisation.

Key Requirements Within the Application

Defining Charitable Purposes and Selecting Subtypes

Clearly defining your organisation’s charitable purposes is a fundamental part of the ACNC registration application. Your purposes represent the reason your organisation exists and what its activities aim to achieve. Under the Charities Act 2013 (Cth), these purposes must be genuinely charitable and for the public benefit.

The application requires you to select charity subtypes that accurately reflect these purposes. The Charities Act 2013 (Cth) recognises various charitable purposes, including:

• Advancing health or education
• Advancing social or public welfare
• Advancing religion or culture
• Promoting reconciliation, mutual respect, and tolerance
• Promoting or protecting human rights
• Advancing the security or safety of Australia or the public
• Preventing or relieving the suffering of animals
• Advancing the natural environment

It is crucial to select only the subtypes that align directly with your organisation’s stated objects and activities as outlined in your governing document. Choosing incorrect or irrelevant subtypes can lead to delays in processing your charity registration application. Most organisations typically select between one and three subtypes.

Demonstrating Compliance with Governance and External Conduct Standards

Registered charities must comply with the ACNC’s minimum Governance Standards. Your registration application needs to demonstrate how your organisation meets, or intends to meet, these standards. These standards cover essential aspects of good governance, ensuring charities are well-run and accountable.

Key areas addressed by the Governance Standards include:

• Purposes and Not-for-profit Nature: Operating consistently as a not-for-profit and pursuing stated charitable purposes.
• Accountability to Members: Ensuring members have adequate opportunities to raise concerns about governance.
• Compliance with Australian Laws: Adhering to all relevant laws and avoiding serious offences.
• Suitability of Responsible People: Taking steps to ensure board or committee members are not disqualified.
• Duties of Responsible People: Ensuring Responsible People understand and fulfil their duties, such as acting with care and diligence, managing conflicts of interest, and ensuring responsible financial management.
• Maintaining Public Trust: Complying with obligations related to schemes like the National Redress Scheme where applicable.

If your organisation operates overseas, including sending funds or working with international partners, it must also comply with the ACNC External Conduct Standards. These standards address risks associated with overseas activities, covering areas like financial management, anti-fraud measures, and the protection of vulnerable people. You will need to provide details about overseas operations and confirm compliance in your application.

Applying for Tax Concessions and DGR Endorsement Through ACNC

The ACNC charity registration application provides a streamlined way to apply for Commonwealth charity tax concessions administered by the Australian Taxation Office (ATO). You do not need to submit separate applications to the ATO initially.

Within the ACNC application form, you can request endorsement for:

• Income tax exemption
• Fringe benefits tax (FBT) exemption or rebate
• Goods and services tax (GST) concessions

You can also apply for DGR endorsement through the same form, selecting the relevant DGR category that applies to your organisation or a specific fund, authority, or institution it operates. Remember that not all charities are eligible for DGR status.

While the application is submitted via the ACNC, it is the ATO that assesses eligibility and makes the final decision on tax concessions and DGR endorsement. The ACNC forwards the relevant sections of your application to the ATO after granting charity registration. The ATO will then notify you directly of their decision regarding endorsements.

After Submitting Your Application

The ACNC Assessment Process

Once you submit your charity registration application, the ACNC begins its assessment. This review process involves:

• Checking the information provided in your application against eligibility requirements outlined in the Charities Act 2013 (Cth)
• Determining if your organisation meets the legal definition of a charity

During this review, the ACNC may need further clarification or additional details. If queries arise regarding your registration application, the ACNC will contact the nominated application contact person you provided. Ensuring the contact details are accurate helps facilitate smooth communication throughout the assessment process.

Receiving Notification and Next Steps

Following the assessment, the ACNC will notify your organisation of its decision regarding charity registration. If your application is successful:

• The ACNC officially registers your organisation as a charity
• Your charity’s details will be added to the public ACNC Charity Register
• Your organisation is permitted to use the ACNC Registered Charity Tick logo

Displaying this logo on websites, marketing materials, and during fundraising activities can help build public trust and confidence by clearly showing your status as a registered and regulated charity. However, you must agree to the terms and conditions before using the tick.

ATO Assessment for Tax Concessions

While you apply for Commonwealth tax concessions and DGR endorsement through the ACNC registration application, the ACNC does not make the final decision on these. After the ACNC approves your charity registration, it forwards the relevant sections of your application to the ATO.

The ATO is responsible for assessing your organisation’s eligibility for specific tax concessions, such as income tax exemption or GST concessions, as well as DGR endorsement. The ATO will conduct its own review based on tax laws and subsequently inform your organisation directly of its decision regarding these endorsements.

Conclusion

Successfully registering as a charity with the ACNC involves confirming eligibility, meticulously preparing essential information and documents using the ACNC checklist and guide, navigating the online registration application, and understanding post-submission assessment processes. Thorough preparation and a clear understanding of requirements like charitable purposes and governance standards are vital for a smooth charity registration journey.

If understanding the complexities of the ACNC charity registration application seems daunting, contact LawBridge today for trusted expertise. Our team of not-for-profit lawyers can guide your organisation through each step, helping ensure compliance and simplifying the path to achieving registered charity status.

Frequently Asked Questions