Covid-19 impact on Small Businesses in Australia  

The international COVID-19 Pandemic has had a significant impact on the operations and financial viability of many small businesses. Small businesses make up a large percentage of businesses in Australia and are a vital part of the economy. In response to the challenges posed, the Australian Government has introduced insolvency reforms to provide aid and assistance during this difficult and uncertain time.  


Previous Insolvency Framework  

As the most sweeping insolvency reforms in the last 30 years, the changes provide flexibility for small businesses seeking to restructure or wind down. [1] These changes are welcomed, as the approach outlined in Part 5.3A of the Corporations Act 2001(Cth) have been particularly complicated and expensive.  


2021 Insolvency Reforms  

Taking effect on 1 January 2021, The Corporations Amendment (Corporation Insolvency Reforms) Act 2020 (Cth) includes (but not limited to) the following changes:  

    • Debt Restructuring Options for Small Business  
    • Simplified Liquidation Procedure 


What small businesses are included in the reforms?  

Pursuant to the reforms, a small business is defined as:  

    • Incorporated Small Business (with company structure) 
    • Liabilities less than $1 million  

We commend these reforms as these changes maximize control during the difficult process of debt restructuring and conclusion of small businesses. 


If you require any assistance with managing or winding down your small business, please feel free to contact our office and speak with a  Business Development Officer  on (07) 3252 0011 to discuss your matter today.


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[1] Media Release – Insolvency Reforms Pass Parliament  


Preserving Charitable Assets within Charitable Purposes


Cy Pres (pronounced Sigh Pray) is not a phrase you hear often, and yet applications to the Court for a Cy Pres Order are increasingly common.

Cy Pres is a phrase we have adopted from the French meaning, “as near as possible” to the original intention. (Don’t believe us? Check it out!)

Most people are familiar with the concept of a trust – usually established when one person or entity (settlor / donor) gives money to another person (the trustee), and directs that they use it for a specific purpose (the terms of the trust) or for the benefit of a specific person or entity (a beneficiary).

A trust is a charitable trust when it is established for charitable purposes (objects).

A Charitable trust can be defined as, “A purpose trust that is directed to exclusively charitable purposes (Leahy v A-G (NSW) (1959) 101 CLR 611) and that exhibits public benefit (Attorney-General (NSW) v Perpetual Trustee Co Ltd (1940) 63 CLR 209).” (Encyclopaedic Australian Legal Dictionary, Lexis Advance)

A charitable trust may be quite general (for example for the relief of poverty) or highly specific (for example the care of the aged in a specific geographic region).

Charitable trusts need not have any vesting date, and may exist in perpetuity.

Things change. Charities cease to exist and sometimes specific charitable trust obligations become impossible to perform.

For example care facilities run by charities are sometimes sold to for-profit operators. These changes may make the original intended performance of the terms of the charitable trust impossible or impractical.

Sometimes the terms of the charitable trust have an express power of amendment but often they don’t (especially when the charitable trust is embedded in a Will, known as a testamentary charitable trust).

The law favours charities and seeks to save / uphold charitable trusts. And so, in such cases there is an ability to apply to the Court for an Order from the Court to apply the trust property “Cy Pres”, or as near as possible to the original charitable intent of the trust.

Section 105 of the Trusts Act 1973 (Qld) provides that the Supreme Court of Queensland may make orders allowing the trust property to be applied Cy Pres , including in circumstances where The original (charitable) purposes cannot be carried out, or can not be carried out according to the directions given.

In fact, the trustee of a charitable trust is under an obligation, where the terms of a trust cannot be carried out, to apply to the Court for an Order to enable property to be applied Cy Pres, or be at risk of personal liability by acting in breach of trust.

In Queensland, a Cy Pres application usually made by the trustee of a trust, application may also potentially be made:

    • by the Attorney-General or person authorised by the Attorney-General;

    • by the charity, or any trustee of the trust; and

    • by any person interested in the due administration of the trust.
      (Source: s 106(2) of the Trusts Act 1973 (Qld))

Here at Corney & Lind Lawyers, we have recently had the privilege of assisting a client with several Cy Pres applications in the Supreme Court in 2018 which have all resulted in successful orders being granted in the terms sought the preservation and protection of charitable assets within charitable purposes.

His Honour Justice Bond observed that he’d seen very few such applications over the course of his practice, and yet he had dealt with a number in the month prior to the hearing of these applications!

Although many decisions made as a result of applications for Cy Pres orders are not published by the Court, a brief look at the range of published decisions shows that there are a variety of applications coming before the Court for a wide variety of reasons.

These applications can be complex, but with a wealth of experience in both litigation and charity law, the specialist charity and NFP law team here at Corney & Lind Lawyers are well placed to advise and represent applicants in Cy Pres matters.

ACNC Charities Part III: Public Benevolent Institutions



This article (Part III) will outline what Public Benevolent Institutions (“PBI“) are, prerequisites for entities seeking to become PBIs, and some of the advantages of becoming PBIs.

In Part I of this series, an entity meeting the Australian Charities and Not-for-profits Commission’s (‘ACNC’) prerequisites can register with the ACNC as a charity, leading to entitlement to a range of tax exemptions and concessions if registered successfully.

In Part II, we outlined that many ACNC-registered charities might also choose to apply for Deductible Gift Recipient (‘DGR’) status for their entire entity or a particular arm of their entity’s functions – enabling donors to deduct these donations from their personal income for tax purposes (which often encourages more frequent and substantial donations from donors).

However, very specific charities meeting stringent threshold requirements might choose to apply to the ACNC for Public Benevolent Institution (“PBI”) status.


What are Public Benevolent Institutions? 

A Public Benevolent Institution is one of the 14 subtypes of charities recognized by the ACNC under section 25-5 of the Australian Charities and Not-for-Profits Commission Act 2012 (Cth) as being eligible for registration as a charity. PBIs differ from other charitable subtypes in that their main purpose is to relieve the poverty, sickness, disability, destitution, suffering, misfortune, helplessness and/or distress of people in need. [i] Put simply – PBIs provide “benevolent relief to people in need”.[ii]

Typical examples of PBIs might include:[iii]

    • Entities that provide housing assistance to people suffering from poverty;

    • Entities providing support services for people with a disability;

    • Particular types of aged-care services – normally situations where aged-care services are provided on a not-for-profit basis; and

    • Hospitals meeting PBI prerequisites.


Advantages of Becoming a Public Benevolent Institution 

Public Benevolent Institutions have an extensive range of taxation benefits potentially available to them. These can include:

    • All Commonwealth taxation benefits generally available to charities (such as income tax exemption, refunds of franking credits, and GST concessions for charities);

    • DGR endorsement and a DGR category specifically for PBIs (provided that the PBI meets the requirements for DGR endorsement – see Part II); and

    • Fringe Benefits Tax exemptions.


Prerequisites of Becoming a Public Benevolent Institution 

Because of the substantial benefits and tax exemptions/concessions available to Public Benevolent Institutions, the threshold requirements for any entity to obtain PBI status are significantly higher than for obtaining other types of charitable statuses. An entity will only be granted PBI status once registered by the ACNC as a PBI.

Registration requires an entity to:

1) be a charity (according to the legal meaning of “charity”);

2) be an institution;

3) have benevolent relief as its main purpose; and

4) provide the benevolent relief to people in need.

In considering whether the organisation will meet the PBI registration requirements, the ACNC will consider material such as the entity’s governing documents, financial statements, operational plans and activities amongst other things.


1. Entity is a “Charity”: 

See Part I as to what it means for an entity to be legally recognized and registered as a “charity” with the ACNC.


2. Entity is an “Institution”: 

The entity seeking PBI status must be an “institution” – this normally being “an establishment, organisation, or association, instituted for the promotion of some object, especially one of public utility, religious, charitable, educational etc”.[iv]

An “institution” can be an entity such as a corporation, trust or unincorporated association with its own separate identity, that:[v]

    • Either:
        • Has its own activities or provides its own services;

        • Participates in a relationship of collaboration with other entities that is organized and conducted for / promotes benevolent relief; or

        • Engages other people or entities to engage in activities on its behalf;

    • And:
        • Is not merely a fund; or

        • Does not simply manage trust property that is used for benevolent purposes.

    • And:
        • “Brings into being the charitable purposes and intentions of its founders.”[vi]


3. Benevolent Relief as the entity’s Main Purpose:

The charity must have, as its main purpose, to provide “benevolent” relief to people in need. This is not necessarily limited to providing financial relief, but rather also extends to other types of relief (relief from sickness, disability, destitution, suffering, misfortune or helplessness, poverty or distress).[vii] The PBI can have additional purposes, provided that these purposes are “ancillary” or “incidental” to the main benevolent purpose.

Benevolent purposes are exclusively human needs (such as relieving human poverty, human health, human suffering etc.), and these human needs can exist overseas. However, this means that any organisation that provides relief to the suffering of animals will unlikely be registrable as a PBI.[viii]

Furthermore, the ACNC indicates that the level of distress suffered by the people in need that the entity seeks to relieve will also be relevant to the ACNC’s assessment of whether the entity is registrable as a PBI. The ACNC describes the requisite level of distress suffered by the disadvantaged people as needing to be:[ix]

    • Significant enough (and the circumstances difficult enough) to arouse compassion in people in the community;[x]

    • Beyond the suffering experienced as part of “ordinary daily life” (which are distresses that a person would normally be able to get through themselves after enough time has passed);[xi] and

    • Concrete enough – aimed at helping people who are recognisably in need of benevolence.


4. Provide the Benevolent relief to people in need

The services provided by the PBI must be relieving the poverty/distress suffered by the people in need – not merely providing services to people in need.

Benevolent relief can be provided by the PBI directly to the people in need or through associated entities.[xii] In the case of the latter, the ACNC consider whether the entity’s activities are organized and conducted for the purpose of relieving the poverty or distress of people in need.[xiii]

The relief that the Public Benevolent Institution provides must also be specific and tailored to a particular group of people who are recognised to be in need – it cannot be provided to the broader general community, as it is assumed that people in the broader community are not in need of “benevolent relief”.[xiv]


If you are investigating whether your charity would best operate as a Public Benevolent Institution, the friendly team at Corney & Lind Lawyers can help. Contact us today on (07) 3252 0011 or email us at


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[i] Perpetual Trustee Co Ltd v FC of T (1931) 45 CLR 224.

[ii] Australian Charities and Not-for-profits Commission (‘ACNC’), ‘Commissioner’s interpretation Statement: Public Benevolent Institutions’ CIS 2016/03 (Interpretation Statement, accessed 3 November 2022) <>.

[iii] ACNC, ‘Examples of Public Benevolent Institutions’, Public Benevolent Institutions and the ACNC (Factsheet, Accessed 19 September 2022) <>; Australian Taxation Office, ‘Public Benevolent Institution’, Types of Charities (Webpage, 12 October 2016) <>.

[iv] Shorter Oxford English Dictionary; Young Men’s Christian Association of Melbourne v FC of T (1926) 37 CLR 351.

[v] ACNC, ‘Public Benevolent Institutions and the ACNC’, Factsheets (Factsheet, accessed 3 November 2022) <>.

[vi] ACNC, ‘Commissioner’s interpretation Statement: Public Benevolent Institutions’ CIS 2016/03 (Interpretation Statement, accessed 3 November 2022) <>.

[vii] ACNC, ‘Commissioner’s interpretation Statement: Public Benevolent Institutions’ CIS 2016/03 (Interpretation Statement, accessed 3 November 2022) <>, cl 5.1.1.

[viii] FC of T v Royal Society for the Prevention of Cruelty to Animals, Queensland Inc 92 ATC 4441.

[ix] ACNC, ‘What is a ‘main purpose of benevolent relief’?’ Public Benevolent Institutions and the ACNC (Factsheet, Accessed 21 September 2022) <>.

[x] Pay-roll Tax, Commissioner of (Vic) v The Cairnmillar Institute (1990) 90 ATC 4752.

[xi] ACNC, ‘Commissioner’s interpretation Statement: Public Benevolent Institutions’ CIS 2016/03 (Interpretation Statement, accessed 3 November 2022) <>.

[xii] FC of T v The Hunger Project Australia [2014] FCAFC 69.

[xiii] ACNC, ‘Does my charity have to provide benevolent relief directly?’, Public Benevolent Institutions and the ACNC (Factsheet, Accessed 19 September 2022) <>; Australian Taxation Office, ‘Public Benevolent Institution’, Types of Charities (Webpage, 12 October 2016) <>.

[xiv] Australian Council of Social Service Inc v Commissioner of Pay-roll Tax (1985) 1 NSWLR 5