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Amalgamation and Mergers

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Sometimes not-for-profit organisations want to formally join together. This can be because the organisations would be more sustainable and efficient if joined together, or because larger organisations can sometimes find attracting government funding easier.

Before reading on, make sure that you have read our overview Guide to Working With Other Organisations, which can be downloaded from the Working With Others Topic Page

Two organisations can formally join together or ‘merge’ in a variety of different ways, depending on the size, nature and type of organisations involved. There are many different options, or ‘structures’ for merging organisations together. Often, when two organisations combine, one transfers all its assets to the other and then winds up, or both organisations combine to form a brand new organisation, and then both the old organisations wind up. For some structures (for example incorporated associations) there are specific, and more simple, processes which can be used for merging organisations together like the statutory amalgamation process.

Before embarking on an amalgamation or merger, it is a good idea for all organisations involved do ‘due diligence’ on each other, to understand the organisation they are thinking about merging with, and to check to see if there are any problems or issues that should be addressed before the merger. Due diligence is a process which involves both organisations investigating each other by asking for certain information from each other, then reviewing and analysing that information, often with the assistance of professionals such as lawyers and accountants.

Amalgamations

Amalgamating is a process which can be used by incorporated associations based in the same state or territory to combine or merge together to create a single incorporated association. The benefit of an amalgamation process is that certain steps usually involved in a merger happen automatically, making the process of joining two or more organisations together more simple and less expensive. The amalgamation process is available in all jurisdictions except for the Northern Territiroy, where a statutory transfer process can be used instead, and Western Australia, where a new amalgamantion procedure will come in to effect on 1 July 2016.  

Where available, the amalgamation process is set out in the incorporated associations legislation for each state and territory. When individual incorporated associations amalgamate, they form a new incorporated association, and the relevant state regulator will cancel the incorporation of the individual associations without needing to wind them up.

Mergers

If an amalgamation is not available to the organisations involved, a merger process can be used. Unlike amalgamations, a merger is not based on a legislative process and is completely customisable. A merger is basically a contractual agreement between organisations to form a single organisation (either by incorporating a new stucture and all passing assets to that structure, or one organisation passing assets to another). Sometimes the contractual arrangment that sets out how a merger will take place is called a 'scheme of arrangement'.

All types of mergers can be tricky, and it is crucial that organisations get legal advice before they decide to merge, so they know how the process works and what they can expect. It is likely that organisations will need ongoing legal assistance to help them through the merger process.

Don’t know your legal structure?

There are a few steps you can take to find out your organisation’s legal structure. Firstly, if your organisation is a charity, the best place to look is on the ACNC register. Once you have found your organisation’s entry, you can check your rules or constitution which should state the type of legal structure. You can search by name and by ABN or ACN.

If your organisation is not a charity, you should start with the Australian Business Register search. You will need the name and ideally the ABN or ACN of your organisation. If your group is a Company Limited by Guarantee (a federal not-for-profit structure) this will be indicated in the entry as Australian Public Company. If your group is a state-based not-for-profit structure such as an incorporated association or a co-operative, it is likely that the ABR will list it as “Other Incorporated Entity”. You will then need to search your state/territory regulator of not-for-profits to confirm your structure.

The information sheet below summarises the amalgamation process under the Associations Incorporation Reform Act 2012 (Vic). It includes information regarding:

  • what is the effect of amalgamation and whether amalgamation is the best option for your organisation
  • the amalgamation process, and
  • what your organisation needs to do after amalgamating.

Consumer Affairs Victoria (CAV) resources

The information sheet below summarises the amalgamation process under the Associations Incorporation Act (NSW). It includes information regarding:

  • what is the effect of amalgamation and whether amalgamation is the best option for your organisation
  • the amalgamation process, and
  • what your organisation needs to do after amalgamating.

Fair Trading NSW

The fact sheet below summarises the amalgamation process under the Associations Incorporation Act 1981 (Qld). It includes information regarding:

  • what is the effect of amalgamation and whether amalgamation is the best option for your organisation
  • the amalgamation process, and
  • what your organisation needs to do after amalgamating.

Related links

Fair Trading Queensland - Visit the Queensland Fair Trading website for relevant forms, fees and further information about amalgamation and incorporation.

The fact sheet below summarises the amalgamation process under the Associations Incorporation Act 1985 (SA). It includes information regarding:

  • what is the effect of amalgamation and whether amalgamation is the best option for your organisation
  • the amalgamation process, and
  • what your organisation needs to do after amalgamating.

Related links

Consumer and Business Services - Visit the CBS website for relevant forms, fees and further information about amalgamation and incorporation.

There is currently no specific amalgamation process available for incorporated associations in the North Territory. 

The fact sheet below summarises the statutory transfer process under the Associations Act (NT) and the Associations Regulations (NT). It is an route to achieve an amalgamation-like result for incorporated assoicaitons in the Northern Territory. The fact sheet below includes information regarding:

  • what is the effect of a statutory transfer process, and is it the best option for your organisation
  • the asset transfer and dissolution process involved in a statutory transfer, and
  • what your organisation needs to do after the statutory transfer process is complete.

Related Links

NT Department of Business - The Northern Territory Department of Business carries out the oversight of incorporated associations, and this page contains important information for incorporated associations generally and specifically relating to asset transfer, as well as relevant forms.

The fact sheet below summarises the amalgamation process under the Associations Incorporation Act 1991 (ACT). It includes information regarding:

  • what is the effect of amalgamation and whether amalgamation is the best option for your organisation
  • the amalgamation process, and
  • what your organisation needs to do after amalgamating.

Related links

Access Canberra - Visit the Access Canberra website for relevant forms, fees and further information about amalgamation and incorporation.

The fact sheet below summarises the amalgamation process under the Associations Incorporation Act 1964 (Tas). It includes information regarding:

  • what is the effect of amalgamation and whether amalgamation is the best option for your organisation
  • the amalgamation process, and
  • what your organisation needs to do after amalgamating.

Related links

Tasmanian Office of Consumer Affairs and Fair Trading - Visit the CAFT website for relevant forms, fees and further information about amalgamation and incorporation.

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