There may be circumstances where you wish to merge your charity with another registered charity that has similar purposes, beneficiaries and activities.
Merging (or amalgamating) is different to winding up a charity. It is also different to charities working together but staying legally separate, or charities reporting to the ACNC as a group.
This guidance outlines why charities choose to merge, what is involved, and the process your charity needs to follow.
Why a charity may choose to merge
Charities may choose to merge because they:
- think that it would benefit the people they help
- have similar purposes, cultures and values
- conduct similar activities
- already work together
- want to share resources and funding
- think they would be more effective if they worked together.
What is involved in merging
In order to merge, both charities will need to agree to do so.
The way that a charity merges can be affected by its governing document and any relevant legislation (such as its incorporating legislation). For example, a charity may need to have members pass a special resolution at a meeting in order to merge.
Charities intending to merge must also agree on how the merged entity will operate. This includes agreement on issues like office arrangements and management of finances, as well as how employees will be affected.
Things you need to know when merging
Merging can be a complicated process, and charities considering merging need to consider a number of issues.
You may also need to seek professional advice when deciding whether to merge with another charity, especially if your charity has employees, assets or ongoing contracts.
Before deciding whether to merge, you need to know things about the organisation you plan to merge with.
For example, you should look at the legal structure of the organisation your charity is looking to merge with, and whether it is a charity or structured as another type of not-for-profit organisation. This could affect the processes your charity must follow if it does merge.
If your charity and another organisation decide to merge, you may consider setting up a committee with representatives from both organisations to manage the process and keep both parties informed.
If you are establishing a new charity (with a new ABN) when merging instead of continuing one of the existing charities, the new charity should be established before the existing charity is wound up.
If, by merging, you are establishing a new charity, you should do that before winding up your old charity.
When you merge your charity with another organisation, it may result in your charity winding up.
If you have questions about whether your charity can merge with a certain organisation, you must ensure you follow your charity’s rules, as well as legal requirements and obligations to other regulators during the process.
Your charity may need to get professional advice. You can contact us for general guidance.
If your charity is incorporated (such as an incorporated association or company limited by guarantee) the process for merging depends on:
- your charity’s incorporating regulator, and
- the incorporating regulator for the charity you are merging with.
Each incorporating regulator has different processes, forms and other legal requirements which you should be aware of when deciding to merge your charity with another organisation.
You may need to submit forms or information for any new incorporated organisation, and for any existing incorporated organisations which will continue to operate or be wound up.
To find your incorporating regulator, see our list of regulators that may affect charities.
You must follow your charity’s governing document and all legal requirements when merging.
Your governing document is likely to tell you the process to follow when merging. For example, you may need a certain majority of members to pass a special resolution at a general meeting.
The organisation or organisations you are merging with may have requirements in their own governing documents as well.
There may also be legal requirements before, during and after your charity merges. For example, you may need to:
- submit forms to certain Commonwealth, state or territory regulators during the process
- notify other regulators – for example, the Australian Taxation Office (ATO) – that your charity is merging and changing its arrangements
- comply with legal obligations to your employees, and
- comply with requirements under any contracts, leases or other legal agreements.
When you merge your charity, you may need to contact the Australian Business Register to:
- cancel your charity’s ABN, the other merging charity’s ABN, or both
- apply for a new ABN through the Australian Business Register.
Consider seeking professional advice before changing your charity’s ABN, as doing so may affect your ACNC registration and any tax concessions you have.
Merging may affect your charity's access to certain tax concessions. If your charity has tax concessions and you keep your ABN after merging, the Australian Taxation Office (ATO) must reassess your entitlement to tax concessions.
If you cancel your charity’s ABN and wish to register a new charity, you can complete the ACNC’s charity application, and in that application you can indicate that you want to receive charity tax concessions. This information is passed on to the ATO to assess if the new charity is eligible for tax concessions.
If your charity does not have tax concessions but wants to apply for them, see our guidance on charity tax concessions that may be available.
Consider seeking professional advice if you wish to retain or apply for tax concessions.
Notifying the ACNC
When you merge your charity, its details may change, including its:
- name
- legal structure
- charitable purposes
- governing document
- Responsible People, and
- Address For Service.
If you are registering a new ABN for the merged charities, you will need to cancel your current or existing charity’s registration with the ACNC and apply to register the new charity.
You may need to get a new ABN if you change your charity’s legal structure.
Before applying to cancel your charity’s registration, you must submit any outstanding Annual Information Statements. If you don’t do this, you will asked to explain why it is not necessary when you apply to cancel your charity’s registration.
If your charity changes its charitable purposes or activities when it merges, the ACNC will reassess your entitlement to registration as a charity, or as a charity with a particular subtype. You should contact the ACNC to organise for a reassessment.
You will also need to notify the ACNC of changes to your charity’s governing document, Responsible People, and Address For Service. This can be done via the Charity Portal.