Share capital generally allows a company to distribute profits and dividends to shareholders in proportion to the shares they hold meaning that companies registered with shares are considered a “for-profit” structure.
To be considered a special purpose company and be eligible for the reduced ASIC annual review fees, the constitution of a not-for-profit company must be drafted in a way that excludes the company from making distributions to its members or paying its directors and ensures that the company is used to pursue charitable purposes only. This is what makes it a “not-for-profit”.
