Client Portal

Financial challenges of COVID-19 for charities – operating while insolvent

Governance Standard 5 requires a charity’s Responsible People to ensure the charity does not operate while insolvent. In response to the COVID-19 pandemic, the ACNCs approach to interpreting this Governance Standard has been aligned with the amendments made to the Corporations Act 2001 (Cth) by the  Coronavirus Economic Response Package Omnibus Act 2020 (Cth).  This approach applies to all charities, not just to those that operate as companies limited by guarantee.

It is important to note that there are ‘Safe Harbour’ provisions in the Corporations Act 2001 (Cth), which means that a charity does not have to put itself into the hands of administrators if it can plan its way out of insolvency.

To view the ACNC article in full, click here

To view further information about the ACNC compliance approach during Covid-19, click here

To view the ASIC Safe Harbour provisions and information, click here

Let us keep you up-to-date

Subscribe to the NFPAS email newsletter to receive not for profit industry news and special updates.