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Service Agreement Information Kit for Funded Organisations

3.23 Status of organisations

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Legal relationship

The Service Agreement sets out the legal relationship between the department and the organisation. It specifies that the organisation and department are not agents of each other and that they cannot incur liability or make representations on behalf of each other.

The agreement specifies that an organisation is solely responsible and liable for paying superannuation, payroll or any other tax, WorkCover levy or any similar payments or entitlements in relation to its employees.

Legal status of the organisation

To enter into a Service Agreement an organisation must be a legal entity, established under a particular legislative framework. Most funded organisations are:

  • Incorporated Associations
  • Companies
  • Cooperatives
  • Partnerships
  • Entities established under specific Acts of Parliament. These acts are described in more detail in Chapter 2.

Organisations must:

  • comply with all laws applicable to them
  • have an active Australian Business Number (ABN) (if the Organisation is required by law to have an ABN)
  • be registered for Goods and Services Tax (GST) if required by law.

Upon request, the organisation must provide the department with evidence of its status. The organisation must notify the department within five working days of any change to its legal status.

Prior to any proposed change of control in the organisation, an organisation will also give written notice and relevant information to the department so that the department has a reasonable amount of time to consider the impact of the proposed change of control. A change of control in the organisation refers to any change in persons who directly or indirectly exercise effective control over the organisation by holding the majority of voting shares, units or other interests in the organisation or by any other means.

Non-government organisations are sovereign entities and do not need to notify the department when there is a change to a single board member if the change does not constitute a change of control.

Partnership, joint venture or consortium

If the organisation is a partnership, joint venture or consortium of two or more organisations, the organisations are all liable both individually and as a group to the department for the full performance of this agreement.

All members of the partnership, joint venture or consortium will be listed in the Service Agreement. All or some may also be signatories to the Service Agreement, depending on the governance arrangements applying to the partnership, joint venture or consortium. The department may ask for documentation showing how the partnership, joint venture or consortium operates.

The Service Agreement will not terminate automatically on the death, retirement or resignation of one of the members of a partnership.

Change in control, mergers or acquisitions: Guidelines and questionnaire

To ensure the viability and operational capacity of their business, funded organisations may propose a change in control, a merger or an acquisition.

Information on the responsibility of the organisation and the department is available in the: