2.2 Organisation's Legal Status

Before the department can enter into a service agreement and 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.

Funded organisations are required to maintain their legal status, and advise the department within five business days should their status change.

An organisation's legal status is governed by one of the following Acts of Parliament:

• Associations Incorporation Act 1981: This Victorian 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 Act or Cooperatives Acts. In Victoria, Consumer Affairs Victoria administers this act. Similar legislation is available in other states.
• Co-operatives Act 1996: Organisations registered and 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. A charity or other non profit organisation can also incorporate under this Act as a company limited by guarantee. A company limited by guarantee has no share capital, as no profit sharing is contemplated. The Act imposes certain filing and other obligations on these companies, including the lodgement of annual directors' reports and annual audited financial 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 with the Department. Examples of organisations in this category are public hospitals, private or denominational hospitals, and community health centres.
• Individual Acts of Parliament: Organisations can be created by individual Acts of Parliament. These organisations are governed by their own legislation and in some cases are subject to other legislation such as the Public Administration Act 2004 and the Financial Management Act 1994.
• 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 structure in which one or more persons (the trustee) may, for example, hold the legal title to property, shares or money on behalf of another person or persons.

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 court order and not bankrupt.