The 2023 Act introduces a distinction the 1966 Act never drew. It matters at the moment of incorporation and again at almost every later stage.
A “public benefit association” means an incorporated association “that is formed for a charitable purpose that benefits the public interest”. A “member benefit association” means one “that is formed and operated primarily for the benefit of its members”.
Choosing at incorporation
The notice of intention to incorporate must state “whether the association will be a public benefit association or a member benefit association” (section 6(2)(b)(viii) of the Associations Incorporation Act 2023), and the prescribed form has a tick-box for each. The choice can be challenged. Section 9(1)(g) and (h) allow any person to object, within 60 days of the public notice, that the association “seeks to incorporate as a public benefit association when it should be incorporated as a member benefit association”, or the reverse. The Registrar decides, and either side may appeal to a Principal Magistrate (section 10).
The test is the purpose and who benefits. A hospital foundation, a disaster relief fund, a school board, a conservation body or a church mission serving the community is a public benefit association. A golf club, a staff social club, a professional institute, an alumni association or a landowner welfare group serving its own members is a member benefit association. Section 5(3) adds that promoting religion may be a charitable purpose “even if the incorporated association only benefits the members of a particular faith”, so a church can be a public benefit association even though it serves its congregation. See what is a charitable purpose.
What turns on the choice
| Provision | Public benefit association | Member benefit association |
|---|---|---|
| Annual meeting (s 66) | May be dispensed with only if all members agree | May be dispensed with if all agree or the rules say so |
| Annual report (s 74) | Required unless every member waives inspection in writing | Required unless waived or the rules say reports need not be prepared |
| Financial statements (s 81) | Cannot opt out | May opt out under the rules if no public donations above the threshold and no grants |
| Court removal of a committee member (s 45) | Members holding 20% of votes and the Registrar may apply; the Registrar must be joined | Members holding 20% of votes |
| Injunction (s 50) | Registrar may apply | Registrar has no standing |
| Court-ordered meeting (s 70) | Registrar may apply | Committee member or creditor only |
| Expulsion procedure (s 71) | Statutory 15-day notice and hearing | Rules may substitute a different procedure |
| Amalgamation (ss 99, 102) | Cannot amalgamate into a member benefit body unless donations and grants are passed to another public benefit association or spent on its objects | No restriction |
| Surplus on winding up (s 143(4)) | Only to another public benefit association | As the members resolve by two-thirds, subject to the Court |
Why the Act treats them differently
A public benefit association holds money given by donors and the State for the public good, so the Act gives the public a representative, the Registrar, with standing to intervene, and it locks the assets into charitable use for good. Section 102(2) shows the same concern at the point of amalgamation: the Registrar must refuse to approve a public benefit association merging into a member benefit body unless satisfied that its donations and grants have gone, or will go, to charitable ends. A member benefit association spends its members’ own subscriptions on themselves, so the Act leaves supervision to the members and lets the rules relax the reporting regime. The trade-off is that member benefit status may cost the association the grants and tax concessions that public benefit bodies attract; those depend on other laws and on the funders’ own criteria, and this Act does not itself confer tax exemption.
Can the category be changed later?
The Act does not contain an express procedure for converting one kind into the other. Because the category is part of the association’s objects and its notice of intention, a change would require an alteration of objects by special resolution under section 21, lodged with and registered by the Registrar, who could refuse under section 9(5) or treat a public benefit association’s attempt to become member benefit as an application of profits to other purposes. A public benefit association that wishes to become a member benefit body should expect the same scrutiny that section 102(2) applies to amalgamations: its donations and grants must first go to another public benefit association or be spent on its objects.
Tick public benefit if the association’s purpose is charitable and outward-looking and it expects donations or grants. Tick member benefit if it exists to serve its own members and is funded by them. Getting it wrong is a ground of objection and, later, of refusal or cancellation.
Sources
- Associations Incorporation Act 2023 — ss 3, 5, 6(2)(b)(viii), 9(1)(g)–(h), 9(5), 10, 21, 45, 50, 66, 70, 71, 74, 81, 99, 102, 143(4)
Before relying on anything here, read the current text of the Associations Incorporation Act 2023 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.