Getting started

On this page

• Introduction
• What does incorporation mean?
• How to decide whether your group should incorporate
• Next steps

Introduction

Deciding whether to incorporate is an important decision for community groups. While incorporation has many beneficial legal outcomes, it also involves additional responsibilities such as ongoing reporting and disclosure obligations under law.

What does incorporation mean?

Incorporation gives your group its own legal identity (the group becomes a 'separate legal entity' from its members). The incorporated group has the ability to enter into contracts, sign a lease, employ people, and can sue and be sued.

Incorporated groups are incorporated under law (which can be either state or federal) and report to the regulator responsible for their type of structure, for example the Australian Securities and Investments Commission (ASIC).

Incorporated groups follow a particular structure, with group rules (or a constitution), members, and a governing body (often called a board or committee).

Being incorporated has consequences for people who are going to be on the board or committee of management of the group, as legal responsibilities attach to these roles.

Given the importance of the decision about whether to incorporate, your group may want to seek specific legal advice.

How to decide whether your group should incorporate

We've published a fact sheet to help your group consider their incorporation decision.

Our fact sheet explains in more detail what incorporation means and provides a general overview of some of the main differences between ‘unincorporated' and ‘incorporated', including information on:

• what it means to ‘incorporate’
• the advantages of incorporating
• the obligations of incorporated groups
• checklists to help your group decide whether to incorporate
• you have decided to incorporate, what’s next?
• you have decided not to incorporate, what’s next?
• resources to help your group with next steps

Next steps

Your group has decided to incorporate 

If your group decides to incorporate, you need to decide which type of legal structure is right for your group. Taking time to select the most appropriate structure for your group will help the group continue its activities and pursue its purpose while managing potential risk and liability.  

Your group has decided not to incorporate 

If your group decides not to incorporate, it should:  

• Review its decision from time to time. Your group should review its decision to stay unincorporated at least every year and whenever there is a significant change in its activities - for example, if it employs a paid staff member, receives a large grant, wants to lease property, expands or wants to take on further activities, or seek funding.  
• Be aware of the disadvantages of remaining unincorporated. If your group chooses to stay unincorporated, it will not be recognised as a ‘legal entity’ and will not have the benefits of limited liability and perpetual succession.  

Getting Started Tool

Need help making key legal decisions? Our self-help tool will ask you a series of questions about your new organisation - in plain and simple English - and will provide you with information to help you answer these questions.

Use our tool

The content on this webpage was last updated in August 2024 and is not legal advice. See full disclaimer and copyright notice.