Submissions closed on 2 May 2014, to the Senate committee considering the repeal of the Australian Charities and Not-for-profits Commission Act 2012 and the content of new legislation to replace it.

There is divided opinion amongst the Not-for-profit and Charity Sector as to whether Australian Charities and Not-for-profits Commission (ACNC) should be maintained in part or disbanded completely: in particular views diverge on whether the regulatory role it was to adopt be returned to the Australian Taxation Office (ATO) (for tax exemptions and deductible gift recipient status) and to the Australian Securities and Investment Commission (ASIC) (for corporate governance issues).

The performance of the ACNC in its first 18 months of operation has been efficient and educational. The first major deadline for all charities was 31 March 2014 by which date those with an accounting period ending 30 June 2013 were obliged to lodge their first annual information statements (AIS). Many charities have met this deadline though some have not.

In early April, the ACNC website contained a large prompt for any charities which have missed the deadline to remind them to rectify that situation. Presently there are many easy links on the site to provide this assistance.

To follow up missing AIS's, the ACNC's approach will be gentle initially, with issue of reminder letters sent to the address for service which the ACNC holds, but after a period of time, the ACNC will resort to enforcement remedies available under its Act, the most extreme being deregistration.

Any Charity which is unsure how to complete its annual information statement or whether it needs to do so now, may contact us for assistance.

In the repeal of the existing legislation there is a risk that the replacement law will not contain some concessions which presently apply (eg the exemptions for basic religious charities, acceptance of substituted accounting periods and acceptance of simpler accounting records).

Arguably an advantage of retaining the ACNC and its personnel is that a group of individuals with particular charity law knowledge are now constituted as a team who have worked well together for at least 2 years. If those personnel are disbanded, the gathered skills will disperse and the ATO and ASIC whose roles are far broader than the management of charities, may not give the same priority to charities that the ACNC was appearing to provide.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.