Community Organisations: Incorporation

Draw an example of a community organisation you know or are a part of.

What is the benefit of incorporation for club members?

• Limited liability for club debts

• Unlimited liability for club debts

• Personal financial profit from contracts

• Ownership of club assets

What is limited liability?

• The community organisation doesn't need to pay its all its debts

• The community organisation only has a few debts

• The members of the organisation have to pay the organisation's debts with their personal assets

• The members of the organisation do not need to use personal assets to pay the organisation's debts

How many members are required to apply for registration when incorporating a club?

• 20 members

• 15 members

• 10 members

• 5 members

What is a NOT requirement for an incorporated club?

• To file financial statements annually with the Registrar of Incorporated Societies

• Maintaining a list of club members

• A set of rules stating the purpose(s) of the club and how its activities will be managed

• A registered address

Because incorporated clubs are treated in law as if they were a separate person, they can...

• Enter contracts to benefit individual members

• Avoid entering contracts

• Enter contracts to benefit the club

• Enter contracts for personal financial gain

What type of loan can members provide to an incorporated club?

• Mortgage

• Debentures

• Personal loan

• Business loan

A debenture is a type of loan whereby _____ loan money to the club, usually at a very low or zero interest rate, to help finance the purchase of major assets.

What can debentures be used for in an incorporated club?

• To pay for club events

• To pay for membership fees

• To purchase major assets

• For personal financial profit

What are debentures for an incorporated club?

• Asset

• Liability

• Equity

• Income