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Incorporation
This document is an outline of options and plan for incorporation.
For the most up-to-date Association Details, see Association Details.
In a nutshell, we want to create a seperate legal entity to hold money enter into agreements and in the worst case, get sued instead of us.
There are basically two major questions:
- Who will control the entity?
- How much paper work / rules / complexity will it introduce?
Pros:
- Closest match to what we already are informally
- We can use the "model rules" from the Consumer Affairs Victoria website
- Easy to get self-assed not-for-profit status from ATO
Cons:
- Need to have an official AGM every year
- Need to register a financial statement with Consumer Affairs Victoria every year
- Role of secretary needs to be continuously filled.
We can basically get the "model rules" for associations off the web then have a meeting with 21 days notice and submit a form online, pay $35 and BAM!
We need to have an non-profit purpose in our official mission statement AND say that we will give all our money to another similar not-for-profit when we close the association. In this case we will be a self-assessed not-for-profit in the eyes of the ATO. AFAICT so long as we don't employ anyone and turn over less than $150,000 we don't need to file anything with the ATO.
N.B. We are almost exactly a Scientific Organisation from the ATO website.
Under the model rules, the association is ultimately controlled by the members with 1 member having 1 vote. The committee is authorised by the members to sign contracts and are responsible for filing paperwork.
Andy: I don't know why the accountant Lyndon talked to wanted $5,000 per year to do the paper work for us, as a tier 1 assocation consumer vic's own own website says that filing annually (after our AGM) only takes five minutes.
Andy: Considering at our size we don't need to do income tax, register for GST, can self-assess our not-for-profit status and file our annual statement online for free an incorporated association seems like a no-brainer. If we setup a Xero account which we used it for everything had an AGM every year, we'd pretty much be done.
https://www.ato.gov.au/Non-profit/Getting-started/Is-your-organisation-not-for-profit-/
Pros:
- Could be more flexible
- Could make profit and pay it out to shareholders/members
- Accounting maybe cheaper, there are company tax returns as low as $330 online
Cons:
- Ultimately owned & controlled by shareholders, shares need to be sold to change ownership etc.
- Not really the right model, would need to make current committee members into semi-official volunteers and/or shareholders.
- Relatively expensive setup ($469 registration fee, $249 annual review fee)
https://www.asic.gov.au/for-business/starting-a-company/how-to-start-a-company/
https://www.asic.gov.au/for-business/running-a-company/annual-statements/
Andy: I'm convinced this isn't the right fit, basically the shareholders and the director have ultimate power and responsibility, everyone else is just a semi-official volunteer. People would need to buy into the organisation and there're tax implications for owning or even gifting the shares.
Andy: It seems clear to me that the accounting overhead for a company is in fact larger than a small not-for-profit incorporated association. Companies must file annual reports and solvency resolutions to ASIC plus tax returns to the ATO. Where as an incorporated association only needs to file annually with the Consumer Affairs Vic.
Name: "Melbourne Functional Programming Association Inc."
- Initial Secretary: TBC
- Initial committee: Everyone on the current compose committee (- Bernie?)
- Initial members: Everyone on the committee + maybe Noon?
Further the cause of computer science and functional programming though fostering local communities, increasing awareness, providing educational opportunities and organising events; including conferences, meet ups and social gatherings.
The assets and income of the organisation shall be applied solely in furtherance of its above-mentioned objects and no portion shall be distributed directly or indirectly to the members of the organisation except as bona fide compensation for services rendered or expenses incurred on behalf of the organisation.
In the event of the organisation being dissolved, the amount that remains after such dissolution and the satisfaction of all debts and liabilities shall be transferred to another organisation with similar purposes which is not carried on for the profit or gain of its individual members.