Company Limited by Guarantee



Incorporation & Transfer Method:  The subscriber to the Constitution is our subscriber company, and it resigns its membership immediately when the company is incorporated. The subscriber company is then replaced by the members nominated by the client. Thus, in terms of membership of the company, the principal is the same as with any other company.

However, the first directors are the persons nominated by the client. CNL’s nominees are never directors of these companies.

Excluding “Limited” from Company Names:  To assist if an application is later made (to ASIC) to dispense with the word “Limited” in the company name, the required provisions are included in the Constitution. Because our nominees are never directors of this type of company, we are unable to make this application as part of the incorporation process.

Principal Object:  We suggest that your wording should define the section of the community that will benefit, how the benefit will be delivered (provision of defined services, ect), and that the company will operate on a non-profit basis. The ATO will take account of the wording of the Principal Objects in determining tax-exempt status.

Constitution:  These are based on the standard originally drawn up by counsel for the previous Corporate Affairs Commission, and subsequently taken up by ASIC. They are drafted specifically for non-profit associations, and include the provisions required by the ATO for non-taxable status. We will adopt a constitution drawn up by you if preferred, or can provide more specialised constitutions on request.

Class Structure:  CLASSES OF MEMBERS.  The Constitution allows for up to 16 classes of members, divided into those who give the guarantee, and those who do not give the guarantee. For example, in a sporting association, the senior members may be guarantee members, but it may be considered appropriate that those under 18 not give the guarantee. Each class can be given its own unique name. If no specific classes are nominated, the Constitution (by default) creates membership classes named GUARANTEE member and ASSOCIATES.

Generally, without modifying the Constitution, the classes can be allocated different voting rights, different joining fees and different annual subscription rates. Beyond these distinctions, specific modifications (in the form of additional Class Rules) will need to be added, and the Constitution contains a Schedule for this purpose.

Additional CLASS RULES (where necessary) generally take the form of defining the types of persons who may apply for membership of the various classes. For example : a sporting association may create 2 guarantee classes named Senior Active and Senior Retired, and 2 Associate classes named Junior Active and Social.

Directors & Officers:  A Company Limited by guarantee is a public company, and must have a minimum of 3 Directors and 1 Secretary. NOTE: At least 1 Director and 1 Secretary must be an Australian Resident.

Members:  The minimum number of members is 1 who gives the guarantee.