The new regime for charities in Australia is a major step closer to being implemented, with the passage today of the Australian Charities and Not-for-profit Commission Bill 2012 and Australian Charities and Not-for-profit Commission (Consequential and Transitional) Bill 2012.
When they will come into effect is still unknown, and currently they affect only charities, not all not-for-profits. We are of course still waiting for the Regulations, which will fill in many gaps in the legislation, most importantly the governance standards.
Nonetheless, charities will need to ensure they're ready for the new regime, particularly to comply with the new requirements for:
- annual information statements: registered charities will be required to provided annual information statements to the ACNC from the 2012-13 financial year, with the first due in December 2013 for most charities.
- financial reporting: registered charities will be required to provide financial reports from the 2013-14 financial year, with the first due in December 2014 for most charities.
- governance and external conduct standards: compliance with governance standards and standards for dealings outside Australia will be a prerequisite for registration and failure to comply can result in a charity's registration being revoked.
- directors' liabilities: directors of incorporated charities will not be generally responsible for the obligations of the charities but may be personally liable to pay amounts due under the legislation in limited circumstances. However, trustees, directors of trustee companies and members of committees for unincorporated associations may be personally liable for obligations in a broader range of circumstances.
- Corporations Act amendments: For charities that are incorporated under the Corporations Act 2001 (eg. charities that are companies limited by guarantee), the ACNC will replace the Australian Securities and Investments Commission as the main regulator. Under consequential changes made in the ACNC legislation, these charities will report to the ACNC instead and a number of governance requirements in the Corporations Act will cease to apply over time, including a number of civil duties of directors and requirements in relation to holding meetings or notifying ASIC of certain events.
Coupled with the broad powers given to the Australian Charities and Not-for-profits Commissioner, and the limited ability of registered entities to dispute his or her exercise of them, charities should getting ready now.
We'll be sending out an updated guide to the new regime next week incorporating some last-minute changes made by the Government, and of course be following all developments closely, especially the release of the Regulations.