[Australia] [Fwd: Re: [Linux-aus] Incorporating an open source geospatial organisation]

[Tim Bowden]

Interesting observation on the incorporation issue from the LA list.
*Groan*, not such good news.

It would seem that if an organisation doesn't actually conduct any
activities outside its state of incorporation, then they are fine.  If
they do, then national coverage via ASIC company registration is the go.
Still need to get authoritative advice though.

Tim

-------- Forwarded Message --------
From: Del <del at babel.com.au>
To: linux-aus at lists.linux.org.au
Subject: Re: [Linux-aus] Incorporating an open source geospatial
organisation
Date: Tue, 17 Jul 2007 09:47:53 +1000

> acs is incorporated in the ACT only and is a national organisation.  the 
> only requirement is that the public officer must live in the state in 
> which the association is incorporate, so our Public Officer is a canberran.
> 
> Similarly Electronic Frontiers Australia is incorporated in SA and I am 
> the public officer and this too is a national organisation.
> 
> I dont know the whys and the wherefors of company limited by guarantee 
> vs incorporated association, perhaps its in the protections afforded to 
> directors although i've never felt threatened as a director of either 
> organisation, but perhaps that's the old 'ignorance is bliss' :)

Both will provide a limited amount of protection for both directors and
members with regards to the liabilities of the company / association (e.g.
if a company limited by guarantee goes bankrupt, the members can't be
held responsible for the debts of the company), however in the case of
an incorporated association that protection only applies to those officers
or directors who live in the state in which the association is incorporated.
That is unless the association purchases additional directors' liability
insurance.  Even then there is a doubt as to whether your insurance would
cover out-of-state activities (check the fine print).

>  From a cost perspective, its $120-ish vs $1000-ish.

$120 is the cost of incorporating an association in the ACT.  If you wanted
to do it in every state it would cost more than that, e.g. approx $500 in
NSW (and you require audited books, etc).  SA and ACT are the cheapest
jurisdictions to incorporate in.  If you wanted to incorporate an association
in every state it costs a fair bit more both in money and time/paperwork
than doing it once nationally as a company limited by guarantee.  Plus you
have one piece of national legislation to comply with rather than 7 pieces
of state legislation.  Are you a "prescribed association" in SA?  What about
in NSW?  Does auditing the accounts of an association incorporated in QLD
by an accountant resident in VIC allow you to submit those accounts in WA?
Or do you need 7 separate books of account, each audited state by state?

The SCA was incorporated as an association in SA.  They found that despite
having $10m public liability insurance they couldn't hire halls from the city
of Brisbane because the QLD government wouldn't recognise the validity of
our insurance in QLD unless we were incorporated there.  That was pretty
much the nail in the coffin for the incorporated association route, and they
ended up reforming as a company limited by guarantee.

</ban state governments>