Legal Structure Guide – Impact Investing Hub

How to Use This Framework

In Australia, there is no single legal form specifically designed for social enterprises. Instead, purpose-driven organisations operate across a spectrum of legal structures, each with different implications for the types of capital they can raise, governance, tax and DGR eligibility, and regulatory obligations.

Sources of Capital

Equity, debt, philanthropic funding, and member or community capital — mapped against each legal structure.

Legal Vehicles

Not-for-profit and for-profit structures — each with distinct constraints on capital access and distribution. Some structures, like Indigenous Corporations, can operate as either.

By mapping these together, this framework helps clarify:

Which funding sources are legally available to different entity types
Where structural constraints limit capital options
How legal design influences long-term alignment between purpose and capital

Note: This is not a ranking of structures. There is no "best" legal form — the right structure depends on your organisation's mission, capital needs, governance preferences, and whether philanthropic support is essential.

Legend:

✔

Available

✘

Not available

Conditional / partial

Legal Structure	Equity	Debt	Philanthropic	DGR	Member Capital	Key Structural Constraint	Regulation
Not for Profit
Public Company Limited by Guarantee (CLG)	✘	✔	✔	✔	✘	No share capital or shareholders. Cannot pay dividends or offer equity capital. Can trade and make surplus but must reinvest profits.	Nationally applicable law and regulation by ASIC or ACNC if a registered charity.
Incorporated Association	✘	✔	✔	✔	✘	Intended for community non-profit activities. Not suitable for running a large commercial business or raising investment. No equity pathway.	State-based law and regulation (e.g. Fair Trading in NSW). Regulated by ACNC if a registered charity.
Cooperative (Non-distributing)	~Limited – may issue member shares and co-op capital units (CCUs)	✔	✔	✔	✘	Cannot distribute surplus to members. One member, one vote. Surplus must stay within the organisation.	Nationally applicable law but state-based regulation (e.g. Fair Trading in NSW).
Charitable Trust	✘	✔	✔	✔	✘	Controlled by trustees rather than members or shareholders. Cannot offer ownership stakes to investors or raise equity. Can borrow money and raise funds through donations or grants.	Established by trust deed. State-based law. Tax considerations apply.
Mutual	~Available if MCI (Mutual Capital Investment) rules apply	✔	✔	✔	~Depends on type	One member, one vote. If registered as a charity, cannot issue Mutual Capital Investments (MCIs).	Depends on structure: corporate law, state incorporated association, or general trust law.
Can be Not for Profit or For Profit
Indigenous Corporation	✔	✔	✔	✔	✔	Several structures possible.	Regulated by ORIC if registered under the CATSI Act. Could also be regulated by ASIC, states, or ACNC.
For Profit
Pty Ltd Company	✔	✔	~Non-DGR philanthropic capital only	✘	✔	Simplest company structure owned by shareholders. Can distribute profits. Restrictions apply to raising equity. Suitable where scalable profit supports equity returns.	Nationally applicable law and regulation. Regulated by ASIC.
Public Company	✔	✔	~Non-DGR philanthropic capital only	✘	✔	Must prepare annual financial reports and, in many cases, have them audited. Higher compliance and transparency requirements. Designed for larger capital raises.	Nationally applicable law and regulation. Regulated by ASIC.
Cooperative (Distributing)	~Must issue member shares; may also issue Co-op Capital Units (CCUs)	✔	~Non-DGR philanthropic capital only	✘	✔	Dividends allowed but capped. One member, one vote. No strict rule requiring surplus assets to go to another not-for-profit on winding up.	Nationally applicable law, but state-based regulation (e.g. Fair Trading in NSW).
Unit Trust	~Akin to equity but technically units	✔	~Non-DGR philanthropic capital only	✘	✘	Controlled by trustees. Units can be bought and sold similarly to shares.	Nationally applicable law. Complex tax considerations. May be regulated by ASIC as a managed investment scheme.
General Partnership	~Provided by partners only	✔	~Non-DGR philanthropic capital only	✘	✘	General partner is personally responsible for the partnership's debts. Equity limited to the resources of the partners.	State-based law. Not registered with Fair Trading.
Limited Partnership	✔	✔	~Non-DGR philanthropic capital only	✘	~Depends on type	Can be incorporated or not. Incorporated limited partnerships are common for venture capital.	State and federal law and regulation. Registered with Fair Trading in NSW.

Disclaimer: This framework provides general guidance only and does not constitute legal advice. The legal and regulatory landscape for social enterprises and impact investing in Australia is complex and subject to change. We strongly recommend seeking advice from a qualified legal professional before making any structural decisions. For legal assistance, contact MinterEllison or another specialist firm with expertise in social enterprise law.