In New South Wales many not-for-profit organisations have traditionally operated using an incorporated association as the preferred business structure.
However, incorporated associations are generally constituted for the purpose of engaging in small-scale non-commercial activities. Consequently, as the commercial operations of an incorporated association grows into medium and large scale operations, so generally does its interest in converting to a company limited by guarantee.
The process of converting from an incorporated association into a company limited by guarantee is not as daunting as one might think, but does require a degree of planning and compliance with the relevant corporate laws.
Typically the process would involve the following three general steps:
The management committee of the incorporated Association resolves to convert to a company limited by guarantee, subject to member approval by way of special resolution.
The members pass a special resolution to effect the conversion to a public company limited by guarantee, and if a new Constitution is required, to adopt the new Constitution and any change in name of the Association.