This chapter in one minute
- Read Chapter 2B first: it sets out the duty, the money traps and the AGM. This chapter adds the detail an accountant needs.
- Directors of a club company carry the full section 588G duty. A registered charity also answers to the ACNC, and the ACNC’s warning signs match BusinessSolvency’s signals.
- Most clubs pay little or no income tax, so enter 0% or a small share of the company rate.
- Clubs keep their books in Xero, MYOB or QuickBooks like any business, so BusinessSolvency’s import works the same way. What differs is who checks the accounts and who receives the reports.
- At each annual check, build a three-year forecast with the treasurer, write a short letter to the committee or board, and ask for it to be minuted.
⚠ General information, not legal or tax advice
This chapter summarises the rules in plain English as at October 2026. The Queensland rules have been checked against the Queensland Government’s own pages; other states differ; Chapter 2D.4 sets out what has been checked so far. Licensed clubs’ liquor and gaming obligations have not yet been checked.
In short: club directors are company directors. A charity’s people in charge also answer to the ACNC.
Companies limited by guarantee. The members each guarantee a small amount if the company is wound up, and there are no shareholders. The directors are company directors under the Corporations Act, so everything in Chapter 2A applies: the section 588G duty to prevent insolvent trading, ASIC Regulatory Guide 217, the safe harbour, and Director Penalty Notices for unpaid PAYG withholding, GST and super. Being an unpaid volunteer director does not lessen any of it.
Registered charities. Where a company limited by guarantee is also a registered charity, some directors’ civil duties under the Corporations Act are replaced by the ACNC Governance Standards, but the ACNC confirms section 588G still applies. Governance Standard 5 requires the charity’s Responsible People to make sure it is not allowed to operate while insolvent, whatever its legal form.
The ACNC’s own warning signs of insolvency line up with the signals BusinessSolvency already reports:
| ACNC warning sign | Where BusinessSolvency shows it |
|---|---|
| Trouble paying bills or staff on time | Cash forecast to run out; short-term debts larger than short-term assets (Current Ratio below 1) — Chapter 9 |
| Losses year after year | Net Income (read it as the surplus or deficit) and the Sustainable Cashflow target, year by year — Chapter 3 |
| Overdue PAYG, GST or super | ATO amounts owing that cash does not cover — Chapter 9 |
| Loans declined; suppliers wanting cash up front | “Threatened borrowing” (new debt that pays for no equipment or reserve); suppliers being paid more slowly — Chapters 11 and 12 |
| Relying on uncertain funding | “Members’ levies, grants or appeals are covering a trading gap” on the Solvency Forecast |
In short: a large sector, and a good share of it is under real strain.
Licensed clubs. ClubsNSW’s May 2026 snapshot of 649 clubs found gaming was 45.1% of income and wages 43% of expenses. It names electricity, insurance and compliance costs, and says weak profitability drains cash and “can push clubs toward credit and loans”. That is what BusinessSolvency calls threatened borrowing: borrowing to cover day-to-day costs, which could help for a few months but drives the club further into trouble.
Community sport. The Australian Sports Foundation’s Clubs Under Pressure survey of almost 3,000 clubs found 68% reported higher running costs (up from 47% in 2021), by $20,529 on average. No newer edition has been found, so these are 2023 figures. Many clubs and associations are not registered charities, and no reliable current count of them has been found.
In short: most clubs pay little or no income tax, so the tax rate in BusinessSolvency is either 0% or a small share of the company rate.
- Mutuality. Money from members dealing with the club collectively, such as subscriptions, is generally not taxable. Income from non-members (for example, hiring the function room to the public) and outside income such as interest is taxable. Mixed income, such as bar sales to members and visitors, is split.
- Exempt sporting clubs. A not-for-profit club set up to encourage a game or sport can self-assess as income tax exempt if it meets the ATO’s conditions.
- The ATO self-review return. Non-charity not-for-profits with an ABN must lodge an annual NFP self-review return with the ATO (the first was for 2023–24, due by 31 October).
In BusinessSolvency, enter 0% for an exempt club. For a club taxed only on its non-member share, enter the company rate times that share. For example, if non-member trade is about 30% of the surplus, enter 25% × 30% = 7.5%. The club’s accountant can confirm the figure.
In short: clubs keep their books in the same software as businesses. What differs is who checks them, and who receives the reports.
The books. Licensed clubs run point-of-sale, membership and loyalty systems (SwiftPOS, for example, connects to the gaming systems). Sporting clubs use registration and competition platforms such as PlayHQ. These feed sales and fees into the club’s accounting software (PlayHQ, for example, lists an integration with Xero). Xero, MYOB or QuickBooks remains the club’s main set of books, and that is what the accountant works from. So BusinessSolvency’s import (Chapter 6) works for clubs exactly as it does for businesses.
| Queensland association (from 1 July 2023) | Size test | Check required |
|---|---|---|
| Large | Current assets over $1 million, or revenue over $500,000 | Audit by a certified accountant or registered auditor |
| Medium | Current assets $300,000 to $1 million, or revenue $150,000 to $500,000 | Audit, or verification by a certified accountant, auditor or approved person (audit if another law requires it, for example for gaming machines) |
| Small | Current assets under $300,000 and revenue under $150,000 | Verification by the president or treasurer, unless members want an audit |
A “certified accountant” means a member of CPA Australia, Chartered Accountants ANZ or the Institute of Public Accountants. “Current assets” means cash, bank balances, bar and canteen stock, money owed to the club and short-term investments, not property or equipment.
| ACNC registered charity (from 1 July 2022) | Annual revenue | Financial report |
|---|---|---|
| Small | Under $500,000 | Not required |
| Medium | $500,000 to under $3 million | Reviewed or audited |
| Large | $3 million or more | Audited |
| Who receives the reports | What goes to them |
|---|---|
| Members, at the AGM | The financial statement with the audit report or verification statement. Queensland: AGM within 6 months of year end. |
| Office of Fair Trading (Queensland associations) | The annual return, with the financial statement and the audit or verification report, within 1 month of the AGM. Late lodgement can bring fines for the president, secretary and treasurer. |
| ACNC (registered charities) | The Annual Information Statement, and a reviewed or audited financial report for medium and large charities. |
| ATO | BAS each quarter; the NFP self-review return for non-charity not-for-profits with an ABN; income tax return where the club is taxable. |
| Liquor and gaming regulator (licensed clubs) | Licensed clubs have further obligations under state liquor and gaming laws. These have not yet been checked for this manual; confirm them with the regulator. |
In short: the annual check looks back. About an hour more, with BusinessSolvency, lets you look forward as well.
Auditing standards already ask an auditor to consider whether the organisation can continue as a going concern. A review or verification is narrower. But anyone who can see that next year’s cash will not cover next year’s costs is well placed to say so, and a committee could reasonably expect them to.
The routine
- Enter or import the last three years (Chapter 6). Choose the club structure and tax rate (2C.3 and 2C.6).
- Build the three-year forecast from the committee’s budget and plans: fees, wages, insurance, power, loan repayments, and any levy or grant they are counting on (Chapter 7).
- Allow for the traps in Chapter 2B.4. BusinessSolvency treats all cash alike. If part of it is a tied grant or fees paid in advance, note it: the cash free to pay bills is lower than shown.
- Read the signals for each year (Chapters 9 and 12): cash, whether trading covers loan repayments, short-term debts against short-term assets, the Sustainable Cashflow target, and any threatened borrowing or levy covering a gap.
- Put it in writing to the committee or board, attach the Solvency Forecast, and ask for it to be tabled at the AGM and minuted.
Questions worth asking the treasurer
- How much of the cash at year end is tied grant money, or fees and deposits for next season?
- What will the new facility cost to run each year, not just to build?
- Is any recent borrowing paying for running costs rather than equipment or buildings?
- Are PAYG withholding, GST and super all paid up to date?
- Which grants, levies or appeals is next year’s budget counting on, and how certain are they?
- Are any suppliers now asking for payment up front, or has a lender tightened terms?
- How many months of running costs would the club’s free cash cover if income fell by 10%?
Remember this: what the letter to the committee could say
Keep it short and specific: the first year the forecast shows the club falling short, by how much, the main cause, the choices available (fees and prices, cost savings, a levy, a grant, rescheduling a loan, delaying a project), and a request that the committee or board record its decision in the minutes. Attach the Solvency Forecast. The aim is not to alarm anyone. It is to give the committee the facts while it still has time and choices.
In short: choose one of the two club structures, and BusinessSolvency changes its wording and checks to suit.
| In BusinessSolvency | For a business | For a club or association |
|---|---|---|
| Structure | Sole trader, partnership or company | Club or association (incorporated), or Club company (limited by guarantee) |
| People | Owners, partners, directors | Committee members, or directors |
| Tax | Personal or company rate | “Tax rate on surplus”: 0% if exempt, or the non-member share (2C.3) |
| Money in from the people behind it | Capital or equity | “Levies, Grants & Appeals” |
| Money out to them | Drawings or dividends | None |
| Equity on the balance sheet | Owners’ or shareholders’ equity | “Members’ Funds” |
The reports still use the heading Net Income. For a club, read it as the year’s surplus, or deficit when it is negative. Everything else works as described in Chapters 3, 7, 9 and 12.
Key sources drawn on in this chapter
- ACNC — Companies limited by guarantee; Charities and insolvency; Governance Standard 5
- Ashurst — Changes to financial reporting obligations for charities
- ClubsNSW — Industry Snapshot, May 2026
- Australian Sports Foundation — Clubs Under Pressure (2023)
- Community Directors — ACNC report set to show slight growth in charity numbers and revenue, 10 June 2026
- ATO — Taxable income and mutuality; How I can tell if my sporting club can be tax exempt
- QWALC — NFP self-review return
- Queensland Government — Appointing an auditor or verifier; Lodging your association’s annual return; Club IQ financial reporting requirements
- SwiftPOS — Club POS; PlayHQ — Partners and integrations
- Stephen Fairbairn — Clubs and Associations Research Brief, 12 October 2026