Legal issues involved in establishing a social enterprise

While definitions vary, the term 'social enterprise' is generally used to describe an organisation established for a social benefit that trades to fulfil its mission. Their aim is to achieve social change by harnessing market forces - but establishing a new social enterprise can be complex, with a range of legal structures and options to consider.

PilchConnect is pleased to partner with Clayton Utz to present this new seminar for 2013. Our experienced presenters will discuss the key legal issues relevant to establishing and maintaining a viable social enterprise, including business/organisation structuring, tax concessions, entering into contracts, protecting your intellectual property rights and best practices when dealing with employees and/or volunteers. You will hear from representatives of organisations working in the social enterprise space including Social Traders, 100 Story Building and B Lab Australia and New Zealand.

Details of the seminar are as follows:

Date: Tuesday 24 September 2024
Time: 9.30 - 12.30 (registrations from 9.15am)
Venue: Clayton Utz, Level 18, 333 Collins Street, Melbourne

To register for this seminar, visit our website:

New laws, new rules for incorporated associations - how to update your rules

The Associations Incorporation Reform Act 2012 (Vic) (AIR Act) came into force in November 2012. The AIR Act creates a new regulatory framework for Victorian incorporated associations.

The new framework brings with it new requirements for rules of incorporated associations. Groups using their own rules will now need to review and update their rules to make sure they meet new requirements in the AIR Act.

This practically-focused seminar will provide organisations with information and checklists to understand the changes that have occurred and the process involved in writing or updating their own Rules to meet the requirements of the AIR Act.

Details of the training are as follows:

Date: Tuesday 1 October 2024
Time: 9.30 - 12.30 (registrations open 09:15am)
Venue:  Lionel Murphy Centre, 360 Queen Street, Melbourne

For details of other upcoming PilchConnect seminars, go to NFP seminar series - Victoria.

To register for this workshop, please visit our website:

PilchConnect survey seeking feedback for webportal redevelopment

PilchConnect is excited to be redeveloping its website. In particular, we are creating a new and improved information webportal. We are considering new ways to present legal information, and investigating how we can use new media to reach more people and organisations.

We are seeking the input of our users to this redevelopment, and hope that you will take 5 minutes to complete our very short survey about our webportal and some of our ideas for its new form.

You can complete the survey anonymously, or leave an email address to go into the draw to win attendance at one training session of your choice next year.

Please click the link below to complete the survey:

Advertising in Australia

There are special laws and codes in Australia that apply to all advertising, including advertising by not-for-profits and community organisations.

The laws of advertising apply to traditional advertising like TV commercials and newspaper advertisements, but also extend to signage, social media and even some conversations.

Getting advertising wrong can lead to a breach of the law, and can damage the reputation of your organisation.

The PilchConnect fact sheet on Advertising in Australia provides an overview of the different laws that apply, and practical tips to help your organisation comply. The fact sheet is available on our website:

Advertising

Most not-for-profits produce advertising or communication that is covered by advertising laws in Australia. There are several sources of laws that apply to advertising and communication. These apply not just to traditional advertising like TV commercials or newspaper ads, but also to your fliers, e-bulletins, signage, tweets, Facebook page and even some of your conversations. 

Here are some practical tips to help your organisation comply with the law:

TIP! Is what your communication saying true? Check that it will stay true for the whole time that the communication is in circulation.

TIP! Comparisons (for example "Our organisation directs more of funds raised to delivering programs than other similar organisations in Victoria") are best avoided, as they can break the law if they are not accurate, and the subject of your comparisons may report your advertising if they don't agree.

TIP! Misleading and deceptive conduct can come from more than just positive statements - silence, implications, and even pictures can form misleading and deceptive conduct.

TIP! Most advertising laws are common sense. Stop and think if anyone would object to your advertising, and if so, think about whether there is a lower risk approach.

TIP! Some media (eg TV and radio) have extra rules for advertising.

TIP! If your advertising relates to a regulated event (such as a fundraising drive, or a raffle), check that you included any licence or permit numbers that are required.

For more information, go to PilchConnect's new fact sheet on advertising laws available on our website:

Hunger project case

The Federal Court of Australia recently handed down a judgment in the Hunger Project case (Hunger Project Australia v Commissioner of Taxation [2013] FCA 693), which may have implications for public benevolent institutions or organisations seeking endorsement as a public benevolent institution.

A public benevolent institution (PBI) is a kind of organisation that is able to access many charity tax concessions including deductible gift recipient status and fringe benefit tax exemption. The Australian Taxation Office (ATO) has long held the view that to be a PBI, an organisation must provide 'direct relief' to people in need. The principal activity of the Hunger Project Australia (HPA) is fundraising. HPA gives the money it raises to projects that directly help provide food to people in need. When HPA applied to the ATO for endorsement as a PBI, the ATO rejected its application on the grounds that HPA did not engage directly in charitable activities itself. On appeal to the Federal Court, Justice Perram reviewed the case law and held that an organisation can be a PBI even if it does not directly engage in the provision of benevolent relief.  However, the organisation must have concrete benevolent objects and it was decided that HPA satisfies this criteria as it fundraises to relieve hunger.

This decision opens up the possibility that organisations that may have been previously rejected as PBI on the basis that their activities were not providing direct relief, could be successful if they re-applied. As the ATO has lodged an appeal against the decision, interested organisations should watch this space.

For information about how the ACNC has interpreted the case, go to the ACNC Commissioner's Interpretation Statement - Hunger Project Case.

Amendments to charity tax law

In the last sitting days of Federal Parliament, the Government passed the Tax Laws Amendment (2013 Measures No. 2) Bill 2013 that amends the Income Tax Exemption Act 1997. These amendments add requirements for eligibility for income tax exemption, including that a charity must:

• apply its assets and income solely for the purpose for which it was established, and
• comply with all the substantive requirements in its governing rules.

These amendments effectively add further 'special conditions' that charities must meet to be (or continue to be) endorsed by the ATO for exemption from income tax. The ATO has not yet released its interpretation of the amendments. 

Charities 2013 Annual Information Statement (AIS) resources

The ACNC has recently published a variety of materials to assist charities to complete their 2013 AIS.

The materials can help organisations find out when their AIS is due by reference to their reporting period and also provide step-by-step guidance on how to complete the AIS.

For more information go to the ACNC's website.

PilchConnect's first training session in NSW was held last month with a session focussed on compliance with NSW fundraising law hosted by Gilbert + Tobin Lawyers. To keep up to date with PilchConnect's activities in NSW, subscribe to the PilchConnect NSW e-bulletin.

PilchConnect is a specialist legal service that provides legal help to not-for-profit community organisations.

The service provides free and low cost legal information, training, advice and legal referrals for not-for-profit community organisations. We also undertake law reform and advocacy work about the wide range of legal issues that affect the not-for-profit sector.

To find out more about our legal services, visit our website below:

PilchConnect - Legal help for community groups.

View our staff profiles here.

To unsubscribe, please click here. To subscribe, please click here. If you would like to contribute to, or provide feedback about this e-bulletin, please email connect@pilch.org.au.