An incorporated association offers a relatively simple alternative to forming a company for small non-profit groups such as charities and hobbyists along with sporting, cultural and recreational organisations.
An incorporated association offers similar advantages to a company in terms of limited liability for its members without the complex and expensive administration and set-up costs.
Incorporation gives an association a legal structure independent of its individual members, which makes it easier to enter into contracts, buy and sell property, invest and borrow money and continue regardless of any changes in membership.
Not all associations are incorporated. Members and office-bearers of unincorporated associations may be held personally liable for any debts incurred by the organisation.
An association must have at least five members and any profit generated from trading must be put back into the association instead of being distributed among its members.
Given that members do not receive any financial gain from the association's income, the profits are not subject to tax which minimises reporting requirements and makes administration simple.