There are lots of differences between a not-for-profit and a for profit company (eg profit cash money), but here we're focusing on directors' duties.
A company that's registered with the Australian Charities and Not-for-profits Commission (ACNC) under the Charities Act is not required to comply with certain provisions of the Corporations Act - sections 180-183 in particular.
Registered charities do have equivalent obligations set out in the ACNC Governance Standards, which are a set of core principles, not rules, that allow each charity the flexibility to determine how it will comply with them. Standard 5 sets out duties applicable to people in a position to guide and manage the charity (responsible persons) and are not just limited to directors.
Here's a snapshot of the duties under Standard 5, which in the end are pretty similar to those in the Corporations Act anyway.
NFP Standard 5
- Act with reasonable care and diligence.
- Act honestly and fairly in the best interests of the charity and for its charitable purposes.
- Do not misuse the position of responsible person.
- Do not misuse information obtained in performing duties.
- Ensure that the charity's financial affairs are managed responsibly.
- Disclose any actual or perceived conflict of interest.
- Do not trade while insolvent and s 588G of the Corps Act also applies.
The Governance Standards are not just "lightweight" director's duties and charity directors are not just motivated to comply based on karma. Under the Corporations Act (s184) NFP directors can still commit criminal offences for reckless or dishonest breaches of duties of good faith or acting for a proper purpose and for misusing their position or information. Plus, directors owe fiduciary duties to their companies under the general law, whether or not the Corporations Act applies.
Go on and do some good, just do it in accordance with the (pretty intuitive) Governance Standards.
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