3. How

Connected Communities Association

Next Steps: How to start an Association - So you have started a sports club or maybe a social group looking to connect with others. You know what kind of group you want to make but you don’t know how to make it. Or maybe you already have the group, but you don’t know what the next step is. 

There are two kinds of associations – incorporated and unincorporated.

Although one has more legal obligations than the other, they both exist under tax law. It is important to know whether you do fall under one of these groups to make sure you are complying with the law. Lastly, each state may have different requirements to start an association. 

Luckily, the Australian Tax Office (ATO) has links for what you need for each state.

Unincorporated Associations

An unincorporated association is fairly flexible. You can have a set of rules for the group without needing a formal constitution. There are also no minimum members required. Furthermore, you do not need to register either. However, the group is not a separate legal entity. 

Meaning, that if the association has any problems, the members themselves are liable. Although the association is not incorporated, it is still treated as a company for income tax purposes.

Incorporated Associations

An incorporated association has more obligations than an unincorporated association. When an association becomes incorporated, it becomes its own legal entity. As a result, it can enter into contracts, open up bank accounts, and continue after its members change. In addition, the members gain the benefit of having limited liability. General members of an association are usually only liable for their membership fees. 

In contrast, obligations are also created when an association becomes incorporated. The association now needs to comply with reporting and financial requirements, amongst other obligations. However, if you plan to operate as a business or give your members monetary benefits, you cannot incorporate your association. An incorporated association must have a minimum of 5 members.

There is no obligation to incorporate your association. 

Associations Incorporation Act 2015 (WA): https://bit.ly/AssociationsIncorporationAct2015WA