QLD Not for Profit Company Limited by Guarantee - Clause in Constitution?

[KJG]

We have the following clause in our Not for Profit Constitution. We are a Company Limited by Guarantee.

"The Board must at all times comprise a majority of persons who are considered to have a degree of responsibility to the community."

Can anyone provide me information as to what this really means?

Thanks

 

[Tim W]

It may not be expressly related to your NFP,
but the ATO has published some examples
of what a "degree of responsibility" means for Public Funds.
Note that this list is not exclusive.

Can you tell us more?

 

[KJG]

Thanks Tim. I hadn't come across that one in my searching. Basically our story is my husband, myself and another person started a not-for-profit that was initially an Incorporated Association. We changed the status to the Company Limited by Guarantee in 2014.

The 3 of us are the directors and have one other member (who is my husband's sister). This clause in our new constitution has only recently been flagged in that the other director is resigning from her position and we have to appoint someone else as a director to keep it to 3 directors.

This is a very small NFP <$25,000 revenue per annum. We have DGR status and Charity Tax Concession as the purpose of the org is for providing animal assisted therapy to Disability Support Services. With the 3rd director leaving we were looking at my husband's sister becoming a director. That would mean all directors are related and it has been suggested that this is not possible with this clause being in our constitution.

Look forward to hearing from you. Many Thanks