How To Start a Not-for-Profit in Australia: Key Legal Steps

Starting a not-for-profit (NFP) in Australia is a great way to create positive impact in your community. Whether you’re forming a charity, community group, sporting club or professional association, the right legal setup will help you operate confidently, access funding and build trust with supporters.

In this guide, we’ll walk through what an NFP is, how to choose the right structure, the steps to register, how charity status works, ongoing governance and reporting, fundraising rules, and the core legal documents to have in place.

What Is a Not-for-Profit in Australia?

An Australian not-for-profit is an organisation set up for a purpose other than distributing profits to members, owners or private individuals. Any surplus is reinvested to further its purpose.

NFPs can operate in many areas - education, health, sport, arts, environment, social welfare and more. Some NFPs are charities (and may register as charities), while others are NFPs but not charities (for example, many sporting and social clubs).

It’s important to separate these concepts:

• NFP status: You operate on a not-for-profit basis (profits aren’t distributed to members).
• Charity status: You meet the legal definition of a charity (for example, advancing education, relieving poverty, promoting health), and you choose to register as a charity.

You do not have to register as a charity to be an NFP. However, registering as a charity can unlock tax concessions and additional credibility. We explain this below.

Step-By-Step: How to Start a Not-for-Profit

1) Clarify Your Purpose and Plan

Start by clearly defining your mission, beneficiaries, activities and how you’ll measure impact. Draft a simple business plan covering your goals, budget, team/volunteers, risk management and funding sources (grants, donations, membership fees, trading income).

Being clear on purpose matters: it will drive your choice of legal structure, shape your governing rules and help with charity and tax applications later.

2) Choose a Legal Structure

Your structure affects liability, governance, reporting and funding. Common NFP structures include:

• Unincorporated association (simple, inexpensive, but no separate legal entity - members may carry risk).
• Incorporated association (separate legal entity under state/territory law, suitable for community groups operating mainly within one state or territory).
• Company limited by guarantee (separate legal entity under the Corporations Act, commonly used by larger or national NFPs and charities; members’ liability is limited to a nominal guarantee).
• Indigenous corporation (CATSI) (for Aboriginal and Torres Strait Islander organisations incorporated under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 and regulated by ORIC).
• Trust (used in some cases to hold and apply funds for a purpose; governed by a trust deed).

We outline structure comparisons in the next section.

3) Pick a Name (and Check Availability)

Before you lock it in, check your preferred name is available:

• For a company limited by guarantee or a business name, check ASIC’s registers.
• For an incorporated association, check your state/territory regulator’s register (for example, NSW Fair Trading, Consumer Affairs Victoria, etc.).
• For an Indigenous corporation, check the ORIC register.

If you’ll trade under a name that isn’t your incorporated name, you’ll generally need a Business Name as well.

4) Draft Your Governing Rules

Your governing document sets the ground rules - how decisions are made, who can be a member, how funds are used, and how conflicts are handled. Depending on structure, this might be model rules, a constitution or a trust deed.

• Companies usually adopt a tailored Company Constitution aligned with their purpose and charity requirements (if applicable).
• Associations may adopt regulator “model rules” or a bespoke constitution.
• Trusts use a trust deed drafted to reflect the charitable or NFP purpose.

5) Incorporate and Get Your ABN

Incorporate with the relevant regulator (state/territory, ASIC or ORIC). Then apply for an Australian Business Number (ABN) via the Australian Business Register.

If your NFP’s turnover meets the threshold for Goods and Services Tax (GST), register for GST. Note the GST registration threshold for NFPs is generally higher than for for-profits (e.g. many NFPs have a $150,000 threshold rather than $75,000).

6) Decide Whether to Register as a Charity

If your purpose fits the legal definition of a charity and you want access to charity tax concessions, apply to register with the Australian Charities and Not‑for‑profits Commission (ACNC). Charity registration is optional - but often valuable - for organisations with charitable purposes. More on this below.

7) Apply for Tax Concessions and (If Eligible) DGR

Charity registration can streamline access to Commonwealth charity tax concessions through the ATO. If relevant to your activities, you may apply for Deductible Gift Recipient (DGR) endorsement so donors can claim tax-deductible donations. Not all charities qualify for DGR; eligibility depends on your subtype or listing in a DGR category.

8) Meet Fundraising, Licensing and Other Compliance

If you’ll raise money from the public, you may need a fundraising authority in one or more states/territories. You may also need specific local licences (for example, event permits, raffle/lottery permits and venue permissions). We cover ongoing obligations later in this guide.

9) Put Your Core Legal Documents in Place

Before you launch, set up your contracts, policies and procedures - this is how you protect your mission, people and donors. We list the essentials later in this article.

Which Legal Structure Should You Choose?

The “right” structure depends on where you operate, your risk profile, size, funding model and governance needs. Here’s a practical snapshot.

Unincorporated Association

Quick to set up and low cost. There’s no separate legal entity, so members can be personally exposed to risk. Best suited for very small, low‑risk groups or initial pilot phases.

Incorporated Association (State/Territory)

A separate legal entity with limited liability for members, regulated by your state or territory (for example, NSW Fair Trading, QLD Office of Fair Trading). Good for local or single‑state organisations. If you operate across Australia, you may prefer a company limited by guarantee.

Company Limited by Guarantee (CLG)

A national corporate structure under the Corporations Act, with members guaranteeing a nominal amount. CLGs are common for larger or nationwide NFPs and charities. They require a tailored Company Constitution, board governance and ongoing reporting. If also registered as a charity, the CLG typically gets ASIC reporting relief and reports primarily to the ACNC.

Indigenous Corporation (CATSI)

Aboriginal and Torres Strait Islander organisations may incorporate under the Corporations (Aboriginal and Torres Strait Islander) Act 2006, with the Office of the Registrar of Indigenous Corporations (ORIC) as the regulator. CATSI provides tailored rules that reflect cultural governance needs and can be used for charitable and non‑charitable NFPs.

Trust

Sometimes used to hold funds for a charitable purpose (via a charitable trust) or to operate alongside another entity. Trusts are governed by a deed, with a trustee responsible for compliance with the terms of the trust and relevant law. Specialist advice is strongly recommended.

Registration, Tax and Charity Status: What’s Required?

Entity Registration and Naming

• Associations: Register with your state/territory regulator (and follow its rules for naming and model rules/constitution).
• Companies limited by guarantee: Register the company with ASIC. You might also register a business name if your trading name differs from your company name (you can set up a Business Name if needed).
• Indigenous corporations: Register with ORIC under the CATSI Act.

ABN, TFN and GST

Apply for an ABN (and TFN if required). Consider GST registration based on your projected turnover. NFP GST thresholds are typically higher than for for‑profit businesses, but you should still assess this early to avoid issues once you start fundraising or trading.

Charity Registration With the ACNC

If you meet the legal definition of a charity and want access to federal charity tax concessions and visibility on the national charity register, apply to register with the ACNC. Charity registration isn’t mandatory for all NFPs, but it is generally required to access many tax concessions and can enhance donor confidence.

When registering, you’ll nominate your charitable purpose (for example, advancing education or relieving poverty) and your charity subtype. Your governing document must reflect your charitable purpose and include suitable not‑for‑profit and winding up clauses.

ATO Charity Tax Concessions and DGR

Once registered as a charity, you can usually access Commonwealth charity tax concessions through the ATO pathway. If appropriate, you can also apply for DGR endorsement (so donors can claim tax‑deductible donations). Not every charity is eligible for DGR. Eligibility depends on your activities and whether you fall into an approved DGR category or are specifically listed. If you operate multiple programs, you may also consider setting up a separate DGR fund where relevant.

Tip: Getting your governing document right at the start makes your ACNC/ATO applications much smoother.

Governance, Reporting and Fundraising Compliance

Board/Committee Responsibilities

Your board or management committee is responsible for ensuring the organisation meets its purpose and complies with the law. This includes financial oversight, risk management, conflicts of interest and reporting. Adopting a clear Conflict of Interest Policy early can help maintain trust and integrity.

Financial Reporting and Audits/Reviews

Reporting depends on your structure and regulator:

• ACNC‑registered charities report annually. The level of reporting scales by annual revenue (small/medium/large). Generally, small charities lodge an annual information statement, medium charities require a financial report that is reviewed or audited, and large charities require an audited financial report.
• Incorporated associations report to their state/territory regulator (requirements vary and can scale with revenue and assets).
• Companies limited by guarantee not registered with the ACNC report to ASIC. CLGs that are ACNC charities usually receive ASIC reporting relief and report primarily to ACNC.

The key takeaway: audits are not universally required - it depends on your size and regulator. Make sure you understand which tier you’re in before year‑end.

Fundraising Laws

If you raise money from the public (online or offline), you may need a fundraising authority or licence in one or more states/territories where donors live. This can include ongoing reporting and disclosure obligations (for example, using specific wording on donation pages, receipts and campaign materials). If you plan raffles, lotteries or prize draws, gaming/raffle permits may also apply.

Employment, Volunteers and Safety

If you’re hiring staff, you’ll need proper contracts, fair work compliance and workplace policies. Use clear, tailored agreements for each role. If volunteers support your programs, set expectations with a Volunteer Agreement and provide appropriate training and supervision.

Where you bring on employees, put a compliant Employment Contract in place and consider core workplace policies (for example, code of conduct, bullying and harassment, WHS and whistleblowing - many NFPs adopt a Whistleblower Policy to support a speak‑up culture).

Privacy and Data

If you collect personal information (for example, donor data, volunteer details, beneficiary information or website analytics), you may need a Privacy Policy and to follow the Australian Privacy Principles. Consider data security, access controls and how you handle data breaches. Clear privacy notices on forms and your website help donors and participants understand how their information is used.

Brand and IP

Protecting your name and logo reduces confusion and builds trust. Consider registering your brand as a trade mark to protect it nationwide. You can start by applying to Register Your Trade Mark once you’ve settled on a distinctive name and logo.

What Legal Documents Will You Need?

Every NFP is different, but most will benefit from a core suite of contracts and policies to manage risk and clarify expectations.

• Governing document (constitution/model rules/trust deed): Sets out your purpose, membership, decision‑making and winding‑up clauses.
• Board/committee policies: For example, a Conflict of Interest Policy, code of conduct, delegations, financial controls, risk and safeguarding policies.
• Employment Contract: Terms for employees (role, hours, pay, IP, confidentiality, termination). If you engage contractors, use an appropriate services agreement instead. See Employment Contract.
• Volunteer Agreement: Clarifies roles, safety, training, reimbursement and conduct for volunteers. See Volunteer Agreement.
• Privacy Policy: Explains how you collect, use, store and disclose personal information. Essential if you collect donor/member data or run an online presence. See Privacy Policy.
• Website Terms: House rules for your site, especially if you accept online donations, memberships or event registrations. See Website Terms and Conditions.
• Service or program agreements: If you deliver services to participants or partner with other organisations, a clear Service Agreement sets scope, responsibilities, payment (if any), privacy, IP and risk allocation.
• Brand/IP protection: Trade mark applications and simple IP clauses in your agreements (for example, ensuring staff and contractors assign IP they create for your NFP). See Register Your Trade Mark.
• Business Name: If you trade under a name that’s not your entity name, register a Business Name to ensure transparency with the public.

You won’t need every document from day one, but having the essentials in place before you start taking donations or delivering services will save you time and reduce risk.

Key Takeaways

• Start with a clear purpose and plan - this drives your structure, governing rules and eligibility for charity and tax concessions.
• Choose a structure that fits your footprint and risk: local groups often use incorporated associations; national or larger charities commonly use companies limited by guarantee; First Nations organisations may prefer CATSI incorporation.
• Charity registration with the ACNC is optional for NFPs, but usually required to access federal charity tax concessions; DGR endorsement is separate and only available to eligible organisations.
• Reporting and audit/review obligations depend on your regulator and revenue tier - audits aren’t universal. Understand your level early.
• Fundraising from the public triggers state/territory fundraising laws. Online donations can still require multiple state licences depending on where donors live.
• Put core legal documents in place (constitution, board policies, employment and volunteer agreements, privacy and website terms) and protect your brand with trade marks.

If you would like a consultation on starting a not-for-profit organisation, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.