When establishing a non-profit organisation, founders can choose from a large range of legal forms. An organisation’s legal structure will determine the types of activities it is legally able to carry out and which government bodies it is required to seek registration from or report to. An organisation formed by royal charter or by special Act of parliament are two possible structures of a non-profit organisation. Find out more about the other types of legal structures
Some of the oldest and largest non-profits in Australia take one or other of these legal forms, however, new organisations adopting these structures are now established very rarely.
In the past organisations formed by royal charter were administered by the Prime Minister’s Office, but it now “avoid[s] recommendation of such nonprofit forms”[1]. This form has often been used to incorporate or establish significant organisations. A few examples of these types of organisation are Scouts Australia, The University of Sydney, The University of Tasmania and Engineers Australia.
Organisations formed by special Act of Parliament are established when it is “demonstrated to the government of the day that the organisation is substantial and cannot be accommodated under other incorporating statuses”[2].
Many universities and religious bodies have been incorporated by a special Act of Parliament. The University of Melbourne, The University of Queensland, the National Library of Australia and the National Gallery of Victoria are examples of organisations established through special Act of Parliament.
Organisations conforming within either of these structures are complicated and expensive to establish. They must comply with the specific act or charter relating to their establishment, often called their “constituting documents”.
This fact sheet is intended as a simple overview of non-profit legal forms and terminology. Non-profit law is incredibly complex and there will be many exceptions, restrictions, allowances and important qualifications that are not described above. This fact sheet is not intended and should not be taken as legal advice. In many cases, serious penalties apply to organisations that are found to be lax in fulfilling the requirements of their legal structure. Dedicated legal advice should be sought from a legal practitioner before taking action.
[1] Myles McGregor-Lowndes article “Template for Comparative Country Studies on Laws and Regulations Governing Charitable Organizations” for “International Charity Law: Comparative Seminar”, Beijing China October 12-14, 2004
[2] ibid
Companies House Prefix RC (Royal Charter)
The Companies House Prefix RC refers to Royal Charters as granted by the sovereign based on the advice of the Privy Council, some of these charters have a history dating as far back as the 13th century. Originally their purpose was to create public or private corporations with a definition of their privileges and purpose. Many older universities in England, Wales and Northern Ireland are also defined as Chartered Bodies. However most analysts will come across them when they see the Companies House Prefix of RC.
Definition of a Royal Charter
A Royal Charter is an instrument of incorporation, granted by the head of state (currently the Queen), which gives independent legal personality to an organisation and defines its objectives, constitution and powers to govern its own affairs. As such each charter will operate under slightly different rules, e.g. a University will have different rules to a commercial organisation.
History of incorporation by Charter
Before the 19th century, the grant of a Charter of Incorporation was the only method of creating a separate legal personality. By this means, universities, colleges, schools, municipalities and guilds were established. With the introduction of the first Company Acts the need for Charters was greatly reduced as individuals were able to register their own companies.
Chartered bodies and Companies House
Yes. Organisations incorporated by Charter need to be registered with Companies House, they will allocate a company number with the prefix ‘RC’. This prefix distinguishes them from the other bodies registered at Companies House which are incorporated under the various Companies Acts. Companies House require verification from the Privy Council Office before registering a Chartered body, and before altering an existing registration.
Under the terms of their charter, they do not need to file accounts with Companies House. Any company listed in the Company register with an RC prefix will therefore not have any associated account filings.