On 1 January 2014, the Charities Act 2013 (Cth) commenced. The Act introduces statutory definitions of 'charity' and 'charitable purpose' for the purposes of all Commonwealth legislation and, in doing so, provides much-needed clarity in the not-for-profit sector. Previously, these terms were defined only by case law.Mihilini Fernando, Maddocks Lawyers
On 1 January 2014, the Charities Act 2013 (Cth) (Act) commenced. Before the introduction of the Act, the definition of charity relied on over 400 years of case law. This resulted in charity law that was, in several areas, unclear or inconsistent.
The Act clarifies and condenses the definition of charity by restating the case law in modern language.
The Act also expands the meaning of 'charitable purpose' to better address the needs and practices of the contemporary not-for-profit sector.
Under the Act, a charity means an entity:
Before the Act's commencement, 'charitable purpose' was confined to certain areas, including the advancement of religion and education. Under the Act, 'charitable purpose' has been expanded and now includes the following purposes:
Pursuant to the Act, an entity's purpose will be for the public benefit if the achievement of the purpose would be of public benefit and the benefit would be available to a sufficient section of the general public.
The following purposes are presumed to be purposes for the public benefit, in the absence of evidence to the contrary:
An entity will not be a charity under the Act if it has a disqualifying purpose.
A disqualifying purpose is defined in the Act to be a purpose which involves:
In light of the new legislation, the application form to register a charity with the Australian Charities and Not-for-profits Commission has been updated to reflect the new definition of charity as set out in the Act.
For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of the General Commercial team.
You can read earlier ClearLaw articles on companies and not-for-profits.
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For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of their team.