ACNC replacement options paper

The Government introduced the Australian Charities and Not-for-profits Commission (Repeal) (No.1) Bill 2014 on 19 March 2014. The Bill repeals the Australian Charities and Not-for-profits Commission Act, but leaves open the proposed arrangements that will replace the ACNC.

The Department of Social Services has published a consultation paper outlining the proposed replacement arrangements for the reporting obligations of charities that will follow the abolition of the charities regulator.

Rather than reporting to a separate entity, the Government proposes that as part of replacement arrangements charities will be required to maintain a publicly accessible website that features the following information:

  • Names of responsible persons;
  • Details of all funding received from Government (Commonwealth State and Local); and
  • Financial Reports.

In order to ensure that reporting requirements are consistent with other organisations operating as companies limited by guarantee or Australian registered bodies, charities also registered under the Corporations Act would see the reinstatement of their previous ASIC reporting obligations that were “switched off” when the ACNC was established. These would include:

  • The collection of directors’ and company secretaries’ details;
  • The requirement to have a ‘physical’ registered office and place of business; and
  • The reinstatement of the annual review fee.

Under the replacement arrangements, responsibility for determining eligibility for charitable status will return to the ATO.

It is proposed that ASIC, ATO and State and Territory governments will rely on their current powers to provide an appropriate compliance framework. Those director duties, obligations on charities and compliance measures that existed under the Corporations Act and were turned off by the ACNC legislation would be reinstated.

Legislation for the proposed arrangements, the Australian Charities and Not-for-profits Commission (Repeal) (No.2) Bill is scheduled to be introduced into Parliament later this year and will come into effect upon receiving Royal Assent.

While the new arrangements for regulators such as the ATO and ASIC will take effect straight away, charities will have until 1 July 2015 to update their website with the details outlined in this paper. Any assessments currently being undertaken by the ACNC to determine an organisation’s charitable status will be transferred to the ATO for completion.

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