Board members -  requirement to act with reasonable care and diligence & Superannuation obligations
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Not-for-Profit Law Notes - Emil Ford Lawyers
July 2015
Dear <<First Name>>,

The Australian Charities and Not-for-profits Commission (ACNC) has established five governance standards for charities. The last of these standards concerns the duties of board members or other responsible persons to their charities – in other words, their fiduciary duty. This is one of the highest standards of care imposed and means that board members must not put their personal interests before the interests of the charity or profit from their position, unless the charity consents.

Over the next six months in six different articles we will examine the significant duties of board members of registered charities. In the months to come we will deal with the duty of board members:
  1. to act in the best interest of the charity and for a proper purpose; 
  2. not to improperly use information or their position; 
  3. to manage financial affairs responsibly; 
  4. to disclose and manage conflicts of interest; and 
  5. not to allow a charity to operate while insolvent. 
The topic for this month is the duty of board members to act with reasonable care and diligence.

In this issue of Not-for-Profit Law Notes we will also discuss superannuation obligations and the issue of whether a worker is an employee or independent contractor and we take a quick look at the 2015 Federal 
budget cap placed on the ‘meal entertainment’ benefits. 


David Ford
Board Members' Duty to act with Reasonable Care and Diligence
Board members are required to act with reasonable care and diligence. But what does this look like? To better understand what this means for board members, it is helpful to break it down into four sub-categories.

1.  Prepare for and attend meetings

2.  Become familiar with the charity’s business

3.  Ask questions

4.  Make considered and independent decisions
Read more ...

Employee or independent contractor? Superannuation obligations

Batman provides security services to your organisation.  Is he an independent contractor or an employee?  

Often, answering this question correctly is difficult and always costly if you get it wrong.  Many organizations engage the services of a worker under the auspices of a "contractor agreement" in the hope of reducing tax and other obligations.  However, there is no "quick fix".  Simply calling a worker a "contractor" on paper is not determinative of the relationship.  As the Federal Court said recently, "the parties cannot create something which has every feature of the rooster, but call it a duck and insist that everybody else recognise it as a duck". 
Read more ...

Limiting FBT Concessions on Salary Sacrificed Entertainment Benefits

A consultation paper outlining the Federal Treasury's draft legislation proposing a cap on the "meal entertainment" benefits (including holidays, cruises, weddings, and meals and alcohol in restaurants) available for salary packaging to charity and not-for-profit sector workers has been made available for comments.  

If you would like to make a submission you must do so by Friday 21 August 2015.
Read more ...
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