Individuals and community groups can participate in environmental decision-making and trying to improve environmental laws by lobbying for change (law reform). If a number of people have the same concerns about an environmental issue, there may be benefits to forming an environmental group. For example, a group may be more effective at campaigning than individuals working alone. Forming a group may also give the impression to decision-makers and to the media that the members of the group are serious about an environmental issue.​

There are two types of groups. These are:

  • unincorporated – informal groups that are not legally recognised as being distinct from their members.
  • incorporated – groups that are legally recognised as distinct from their members.

Depending on the type of activities a group wants to conduct, it can sometimes be advantageous to take the decision to become an incorporated group.

​There are several ways for not-for-profit groups to become incorporated in the Northern Territory. These are as:

  • an incorporated association under the Northern Territory Associations Act – Incorporated associations are a type of legal entity suitable for small, community-based groups. Incorporated associations have a constitution which sets out the rules under which the association operates. Incorporated associations are run by a Committee of Management. Committee members undertake certain legal roles such as Chairperson, Treasurer, Secretary, Public Officer and ordinary Committee members. The legal formalities and fees for incorporated associations can be found on the Northern Territory Department of Business website on Incorporated Associations. Incorporated associations are regulated by the Consumer and Business Affairs unit of the Department of Justice. An association incorporated under the Northern Territory Associations Act can only operate in the Northern Territory (unless it applies to also be registered under the Commonwealth Corporations Act).
  • a company limited by guarantee under the Commonwealth Corporations Act 2001– this is a type of public company which is suitable for charitable or not-for-profit organisations. Limited by guarantee means the liability of the company’s members is limited to the amount the members undertake to contribute to the property of the company if it is wound up. This is one way of limiting the liability of the members of the group. If a group is involved in profit making activities, other forms of company structures may be more appropriate (e.g. companies limited by shares). Companies limited by guarantee are regulated by the Australian Securities & Investments Commission (also called ASIC). The legal formalities for incorporating and running a public company limited by guarantee are set out in the Commonwealth Corporations Act 2001 and more information can be found on the ASIC website. A company limited by guarantee is legally recognised throughout Australia.
  • an Indigenous corporation – Aboriginal and Torres Strait Islander groups may form indigenous corporations, which is a type of corporation recognised by the Commonwealth Corporations (Aboriginal and Torres Strait Islander) Act 2006. Indigenous corporations are regulated by the Office of the Registrar of Indigenous Corporation of the Australian Government.
  • a co-operative – this is a type of incorporated group which is registered under the Northern Territory Co-operatives Act. Co-operatives that are established in the Northern Territory are regulated by the Consumer & Business Affairs department of the Department of Justice.

The type of incorporated legal structure you choose has important consequences for the operation of a group. For example, it may affect where your group is allowed to operate (e.g. in the Northern Territory only or in other States and Territories), what activities it can conduct, the costs of registration and administration, and level of legal compliance required. You should seek independent legal advice if you have any questions about which type of incorporated structure is right for your group.

The main differences between unincorporated and incorporated groups which are relevant for environmental not-for-profit groups are:

  • separate legal entity – the incorporated association is a separate legal entity.  This means it can bring a legal action in the name of the group, as opposed to in the names of its members. Similarly, an incorporated group can be sued in its own name, while the individual members cannot be. Insurers and other funders may sometimes require a separate legal entity to be created.
  • Limited liability – incorporated groups have limited liability. This means that if the group has financial difficulties (for example, where the group loses a court case and is ordered to pay the legal costs of the other parties), the individual members have limited liability for the debts of the group. Different types of incorporated groups have different ways to limit the liability of members.
  • Property and fundraising – an incorporated association can own or lease property in its own name, whereas an unincorporated association cannot. There may also be other advantages to incorporating, such as being eligible as an entity to whom people can donate money on a tax deductible basis and being able to obtain grants and insurance.
  • Legal formalities and costs – an incorporated group must be registered and whilst operating, must comply with certain legal requirements. There is a legal procedure for becoming incorporated and for each year afterwards. There is also a legal procedure for winding up an incorporated group when the members wish to end the group. All incorporated groups have some legal administration in the form of registration, fees and annual compliance requirements. Unincorporated groups do not have to hold meetings or have written rules governing how they will be run. They do not have to report to Government or pay registration fees. To be considered an unincorporated association, the group must still have members, it must have formed at a specific time, and there must be a conscious decision to form an association.[1] Usually, this would be reflected in the group having a name and an agreement between members about how the group will be run (but this does not need to be formally written in a constitution or rules).

Insurance

Both unincorporated and incorporated associations must comply with the law (for example, tax law, employment law, and health and safety law) when running the group.

Incorporation cannot completely protect individual members from being sued. If, for example, a committee member of an incorporated association breaks the law, they may be held personally responsible. For this reason, incorporated groups should consider taking out a Directors and Officers Liability Insurance policy to protect the employees and committee members against any legal action they may face.

If you need legal assistance or information on forming an environmental group but cannot afford to pay for a lawyer you may be able to get help from:

References

[1] Conservative and Unionist Central Office v Burrell [1980] 3 All ER 42