Transfers of LALC assets into companies or trusts

August 18,

The NSW Aboriginal Land Council (NSWALC) would like to alert all Local Aboriginal Land Councils (LALCs) who may be contemplating establishing companies or trusts or transferring assets including land to any companies or trusts to exercise due diligence and caution before doing any of these actions or entering into any binding agreements.

NSWALC is here to support LALCs.

NSWALC is always willing to discuss any proposals that LALCs may have or wish to undertake, and to provide guidance and feedback where possible.

Whilst there may be different reasons why LALCs wish to transfer assets to separate legal entities such as companies or trusts, LALCs are governed by the Aboriginal Land Rights Act 1983 and are limited by the provisions of that Act.

For example, the transfer of assets may also be land dealings that are captured by the Act and so require the approval of the Council of the NSWALC. Similarly, if LALCs wish to participate in a trust this also requires the approval of NSWALC.

LALCs, like NSWALC, are not private businesses that can engage in any activity whatsoever.

LALC activities are limited by the Act, and must be transparent and accountable under the Act, to LALC members as well as to NSWALC and Government.

LALCs therefore must at all times ensure that any actions they are proposing are authorised under the Act.

As LALCs may be aware, there have been instances in the past where certain transfers of assets by LALCs have been held to be unauthorised by the Act and unlawful, and resulted in costly legal action.

NSWLC recommends that any LALC considering the establishment of separate entities such as companies or trusts, seek up-front independent expert legal, financial and other advice as well as speaking to NSWALC as part of exercising due diligence for the proposed transaction before making any decisions in relation to the proposed transaction.

Geoff Scott
Chief Executive Officer