Aboriginal corporations

Contributed by Greg McIntyre and Malcolm O'Dell and current to 1 September 2005

Aboriginal and Torres Strait Islander peoples often form corporations to collectively pursue a common activity or undertaking such as holding land, operating a business or receiving financial assistance, while at the same time limiting the financial liability of the individuals in that association.

Most states have legislation that allows for the incorporation of various associations and there is Commonwealth legislation – the Corporations Act – which may also be used.

This type of legislation however is not specifically targeted towards indigenous people and as a consequence the federal parliament passed a special law in 1978 – the Aboriginal Councils and Associations Act 1976, that provides Aboriginal and Torres Strait Islander people with a simple, inexpensive and culturally sensitive way of incorporation.

The key features of an Aboriginal Corporation under the Aboriginal Councils and Associations Act are as follows:

• Membership of Aboriginal Corporations is only open to indigenous people and their (non-indigenous) spouses. Membership may be limited to those indigenous people living in a certain area, or belonging to particular families. This may allow the corporation to access financial assistance from government and other agencies that may not otherwise be the case. This also allows the rules of the corporation to be tailored to take into account indigenous customs and traditions.
• The cost of incorporating is currently $50.00 (much less than incorporating under other legislation).
• There is a government agency – known as the Office of the Registrar of Aboriginal Corporations, that provides assistance with starting and running the corporation, including:
– providing information and other help to incorporate and the provision of training programs to help people run the corporation;
– the provision of standard rules – known as Model Rules, which can be used or modified to become the rules for the corporation.
• In some cases the corporation may not have to lodge annual financial statements.
• If permitted by the rules of the corporation, members may be able to share in any profits of the corporation.

NUMBER OF MEMBERS

There is no limit to the maximum number of people who may become a member of an Aboriginal Corporation. There are, however, minimum numbers of members required depending on the main purpose for which the corporation is incorporated. These are as follows:

• Where the corporation’s main purpose is to own or hold land, such as holding native title land or receiving land grants from the Indigenous Land Corporation, the minimum number of members is 5 adults (18 years of age or older);
• Where the corporation’s only purpose is to operate a business, the minimum number of members is 5 adults;
• Where the corporation exists for any other purpose, the minimum number of members is 25 adults.

TAXATION ISSUES

Aboriginal Corporations can be classified as either charitable or non-charitable.

Charitable corporations are those that are designed to help people in disadvantaged situations or to provide medical, educational, cultural, community development or other similar assistance. Generally, charitable corporations do not have to pay tax on any income they receive; in some cases, other organisations that give the corporation funding may be able to claim that funding as a tax deduction.

Charitable corporations can only operate for the charitable purposes that they are set up for and generally members cannot take a share of any ‘profits’ the corporation may make.

To be charitable, the rules of the corporation have to be worded in a particular way. The Australian Tax Office provides information on charitable corporations and can be contacted on 1300 720 092 or in writing at GPO Box 9935 Perth WA 6000.

Non-charitable corporations on the other hand may have to pay tax on any profits they make, but generally allow for a much wider way of operating, including the distribution of ‘profits’ to members.

PROCEDURE FOR INCORPORATING AN ABORIGINAL CORPORATION

One of the advantages of forming an Aboriginal Corporation is that the procedure for doing so is relatively easy. The Client Services section of the Office of the Registrar of Aboriginal Corporations can be contacted for an ‘Incorporation Kit’ (see contact details at the end of this chapter).

The Incorporation Kit will include:
• a copy of the Model Rules;
• an application form;
• a form to confirm that each member is an adult and an indigenous person;
• a form to confirm that the chosen name for the corporation is culturally appropriate; and
• a form to identify a contact person.

The rules of an individual corporation can be developed, either by using or adapting the Model Rules or by the association developing its own rules. The Client Services section provides assistance and advice regarding incorporation.

FOLLOWING INCORPORATION

There are a number of things that should be done as soon as possible following incorporation.
These are:

• if the first governing committee was not nominated in the rules, a general meeting should be held to elect the governing committee and appoint office bearers;
• the appointment within 3 weeks of a ‘Public Officer’, whose name is then given to the Registrar;
• organisation of a common seal;
• arrangement via the Australian Taxation Office for the appropriate tax-exempt status, if the corporation is to be a charitable one;
• establishment of a register of members.

OTHER THINGS TO THINK ABOUT

For a group considering forming an Aboriginal Corporation, the following may also be of assistance:

• Financial statements have to be provided yearly to the Registrar of Aboriginal Corporations, except where the Registrar grants an exemption.
• The corporation may also have to provide income and other financial statements to the Australian Taxation Office on a yearly basis.
• To ensure that a permanent record of all decisions of governing committee meetings and general meetings is maintained, it is very important that accurate minutes of those meeting be kept.
• The secretary or other nominated person should record all motions put to the meeting, who moved and seconded the motion, and the outcome of the motion.
• The minutes should also note the place, date and time of the meeting and the names of the people in attendance (both members and, if applicable, any nonmembers present).
• The list of members should be updated regularly to ensure that new members are added and ex-members deleted.