By Vera Visevic
Your constitution (or sometimes referred to as your governing rules or charter) is the document that governs how your Not-for-Profit (NFP) organisation operates. It is a legal document — a contract — and its terms must be complied with at all times.
Importance of your constitution
Your constitution must comply with the laws that are relevant to your NFP organisation which may be the Corporations Act 2001 (Cth), or the Associations Incorporation Act of your State or Territory. If your organisation is a charity, your constitution will also need to comply with the Australian Charities and Not-for-Profit Commission (ACNC) Act 2012 and the associated Governance Standards, effective as from 1 July, 2013.
Review your constitution regularly:
As part of good governance, you should review your constitution from time to time to ensure that it reflects your current objects, activities and operations, and so that it does not risk any tax endorsements or concessions that your NFP may currently enjoy. It is also important to ensure that your processes continue to be workable and sufficiently flexible to meet your practical needs.
We generally suggest a constitutional review every two to three years, but if your organisation is a charity, you may wish to review your constitution sooner, to ensure that it complies with the recent changes introduced by the ACNC…
About the Author – Vera Visevic
Vera heads up the Not-for-profit team at Mills Oakley. She practises in a range of areas including not-for-profit, property and commercial law. Acting for numerous charities, religious and not-for-profit organisations, as well as several property trusts and developers in the industrial, commercial and domestic fields, Vera has over 15 years experience in the profession. In the not-for-profit sector, Vera focuses on governance and fundraising issues and regularly advises on ATO endorsements and constitutions. Vera sits on numerous charity boards, associations and committees.