The Use of Complex Structures by Charities

The use of Complex Structures by Charities – a focus area for the ACNC in 2025

As the national regulator for charities, the ACNC announced in 2024 that the use of complex structures would be a key area of focus for compliance and enforcement during 2024 and 2025.¹

The regulator recognises that complex structures can be used by charities for legitimate reasons (including organisational or geographical focus, and risk mitigation), but the primary concerns are the use of these structures to conceal organisational wrongdoing or non-compliance with governance obligations (such as private member benefit), and the potential for inadvertent non-compliance due to organisational mismanagement.²

In 2025, the ACNC released guidance on the governance practices expected of charities that use complex structures.³

What is a complex structure?

The term “complex structure” is not specifically defined, however the ACNC explains that a complex structure typically involves multiple entities operating in a group structure, particularly where there is a mix in the group of:

• entities that are non-charitable (i.e. For Profits and some Not-For-Profits) and charitable;
• entities with different legal structures;
• charities with different charitable purposes or distinct services;
• entities with operations in different jurisdictions (i.e. interstate or international);
• different entities sharing the same directors or management committees;
• different entities sharing the same assets, resources or personnel (i.e. staff or volunteers);
• entities with different levels of regulatory oversight and compliance obligations (i.e. entities with disparate turnovers, or groups including Basic Religious Charities, that do not have to comply with the ACNC governance standards); and
• entities conducting regular or sizable related party transactions.

A common example of a complex structure is a church (whether unincorporated or incorporated in structure) with a separately incorporated care arm that exists for public benevolent purposes.

What is expected of charities within a complex structure?

The governance obligations for charities have not changed.  However, charities within a complex structure will likely be expected to have more robust policies, procedures, and practices to ensure compliance with these obligations.

All registered charities should be familiar with the obligations of the organisation and its responsible persons:

• to maintain entitlement to charitable registration;⁴
• in relation to keeping records and reporting (including notifying the ACNC of changes);⁵
• under the ACNC Governance Standards (other than for Basic Religious Charities);⁶ and
• under the External Conduct Standards (if sending resources or conducting activities outside Australiah).⁷

The compliance obligations that apply will apply separately to each charity within a complex structure. 

In conducting reviews and investigations of complex structures, the ACNC will expect that each charity and its responsible persons turn their minds to the distinct obligations of that specific entity within the group.

Primary considerations for charities in complex structures

The ACNC recommends that each charity within a complex structure focus on compliance in seven key governance areas.  The following section is a summary of the ACNC’s guidance on these areas.

1. Policies and procedures

Consider whether common policies and procedures are appropriate between entities and prepare bespoke documents for an individual charity if necessary.  Ensure that staff and volunteers understand and follow the policies and procedures that apply for each charity.

2. Record-keeping

Ensure that each charity maintains its own up-to-date financial and operational records,⁸ particularly if multiple entities are involved in a transaction, decision, activity, incident, or complaint.

3. Common boards and directorships

If more than one entity shares a board or has directors (or committee members) in common, each board member needs to understand which entity they act for at a given time and ensure that they comply with their duties and obligations for that entity (including “the duty to act in good faith in the charity’s best interests”). 

This is likely to involve maintaining and following appropriate policies and procedures in relation to conflicts of interest and duties, and related party transactions, as well as monitoring the commitment of board members to ensure appropriate and sustainable governance.

4. Board meetings

It is generally recommended that each entity within a complex structure conduct its own board meetings and with separate agendas and minutes, even if meetings are held consecutively for practical purposes.

5. Roles within complex structures

Charities in a complex structure will benefit from maintaining an organisational chart that sets out the roles, responsibilities and reporting lines of the personnel and responsible persons for each entity, particularly where entities share staff, volunteers, and/or board members.  This chart should be included in induction materials and regular training for key personnel.

6. Conflicts of interest

Every charity should have a conflicts of interest policy and related processes, including an interests register, to ensure disclosure and appropriate management of the perceived or actual conflicts of its board members (including personal interests in related entities, personal relationships with responsible persons or personnel from related entities, and conflicts of duties for different entities).

7. Related party transactions

If applicable, each charity should have a related party transactions policy and register to ensure that any dealings between entities in a complex structure are managed appropriately, including (for example) being accurately recorded, in the best interests and within the purposes of any charities, and at arm’s length with independent evidence of value (where appropriate).

We can provide tailored advice regarding how the new guidance may affect your charity or group structure, and meeting your compliance obligations.

Referenced links to ACNC resources:

1. https://www.acnc.gov.au/raise-concern/regulating-charities/acnc-compliance-and-enforcement-focus-for-2024-25
2. https://www.acnc.gov.au/media/news/national-charity-regulator-concerned-about-misuse-complex-corporate-structures
3. https://www.acnc.gov.au/tools/guides/governance-practices-for-complex-structures
4. https://www.acnc.gov.au/for-charities/manage-your-charity/obligations-acnc/maintaining-your-charitys-entitlement-registration
5. https://www.acnc.gov.au/for-charities/manage-your-charity/notifying-acnc
6. https://www.acnc.gov.au/for-charities/manage-your-charity/governance-hub/governance-standards
7. https://www.acnc.gov.au/for-charities/manage-your-charity/governance-hub/acnc-external-conduct-standards
8. https://www.acnc.gov.au/for-charities/manage-your-charity/obligations-acnc/keeping-charity-records/examples-financial-and-other-records

 By Kathleen Stonehouse, Senior Associate