2.2 Agency Legal Status

Before the department can enter into a service agreement to fund an organisation, it must ensure that the organisation is a legal entity established under either an Act of Parliament or other relevant legislative framework.

Legal entity status is governed by one of the following Acts of Parliament or relevant company law:

• Associations Incorporation Act 1981: This Act enables many types of small not-for-profit organisations to incorporate with minimal cost. This type of legal incorporation is suited to organisations that do not fit the criteria for incorporation under the Corporations Law or Co-Operatives Acts. In Victoria, Consumer Affairs Victoria administers this act.
• Co-operatives Act 1996: Organisations incorporated under this Act are autonomous associations of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise. Cooperatives are user-owned businesses.
• Corporations Act 2001: This Act enables public or private companies that are normally created for profit to incorporate. The legal requirements are quite onerous and it is not suited to many small not-for-profit organisations. For example, one of the requirements under this legislation is that organisations submit annual audited reports to the Australian Securities and Investments Commission (ASIC).
• Health Services Act 1988: This Act relates to organisations that provide health services within Victoria. It outlines standards and requirements that must be met by organisations covered under this Act. Organisations that provide services under this Act are required to enter into a health services agreement. Examples of organisations in this category are public hospitals, private or denominational hospitals, and community health centres.
• Individual Acts of Parliament: An organisation can be created by an individual Act of Parliament and can be statutory authorities.
• Local Government Act 1989: The department can enter into a service agreement with a council constituted under the Local Government Act. This includes city councils, rural city councils or shire councils.
• Trustee Act 1958: This Act governs the use and creation of trusts. A trust is a legal arrangement in which one or more persons may, for example, hold the legal title to property. They can also hold other commodities of value, such as shares or money. Trusts are another form of a legal entity whereby a person or persons are members of a board that manages the affairs of an institution or organisation.

The department can also fund individuals (known legally as a 'natural person'). In essence, they must be a person at least 18 years of age, with a mental capacity to understand the service agreement, not under any order and not bankrupt.