Document ID: chunk:federal_register_of_legislation:F2025C00172:body:0:p65
Version: federal_register_of_legislation:F2025C00172
Segment Type: other
Provision Reference: 
Character Range: 168349–171223

three of the control criteria and therefore the religious organisation controls the association.  In this example, the design of the association as set out in its constitution indicates that the religious organisation has the ability to direct the relevant activities of the association even though a publicly elected board of governors has been established.  This design reflects the special relationship between the religious organisation and the association.

Implementation examples

Example IG2

FGH Charity is a private sector not-for-profit organisation.  Its objectives are to protect and serve the community by providing emergency first aid and increasing the first aid skills of the community.  The charity provides first aid at sporting events and when natural disasters occur.  The charity is funded via donations and the sale of first aid supplies (bandages, first aid kits, etc.).  The board of the charity has 10 members.

The charity established TUV First Aid Training Ltd (TUV or the company) some years ago.  The purpose of TUV is to provide first aid training courses to the general public for a fee.  TUV has an eight-member board, with all members appointed by the board of FGH Charity.

The charity has the right to receive distributions of profits made by TUV.

The management of TUV is responsible for the day-to-day operations of the company.  TUV's management is also responsible for developing the company's policies, including:

    * the scope of the training courses, such as the type of courses and the maximum number of participants for each course;

    * marketing plans for the courses, including the fee structure;

    * the frequency and location of courses; and

    * the use of in-house or off-the-shelf training materials.

These policies address the relevant activities of TUV, ie the activities that significantly affect the company's returns.

The board of TUV meets regularly to review reports from TUV management in order to assess the performance of the company.  The board makes decisions about the company's activities and policies so as to optimise its outcomes.  For example, the board might modify the scope or frequency of courses or revise the fee structure.

The TUV board also considers whether any profits should be distributed to the charity (FGH) as a financial return or used to improve or expand the company's activities.

Example IG2A

Based on the facts and circumstances outlined above, the charity controls TUV.  The charity has power over TUV because its board appoints the board members of TUV, thus giving the charity the current ability to direct the relevant activities of the company.  The charity is exposed to variable returns from its involvement with TUV, both financial returns (the right to receive distributions of profits from TUV) and non-financial returns (the furtherance of its objective