Oh...you are going to get me started!
I don't know what it is like there, since I have the US to draw reference from but here goes....
Not-For-Profit status is a bitch to get. Loads and loads of paperwork. You can not be a not-for-profit alone. There needs to be a board of directors which holds regular DOCUMENTED meetings.
You will need a tax exempt number for all purchases and a seperate checking account. The benefits of NFP is that it is easier to get a direct monetary grant to help defer costs. A lawyer on retainer and a good accountant are helpful as well. Not-for-Profit can charge for services BUT all of the money MUST go back into operation costs, and none of it will go to the board of directors.
Incorporating, that is becoming a legal business. Again, you are looking at insurance, tax id number, and if you plan to sell stuff a retail license. There is a couple of forms of Incorporation available.
For normal Corporations (refered to in the US as S Corporations) the shareholders (and there legally are supposed to be shareholders) are taxed on their own income and then the corporation is taxed as well. Again, there is ALOT of book keeping involved
In an LLC, Limited Liability Corp., not only serve as the shareholders are more of a partnership. This helps to avoid double taxation (the business gets taxed, not you).
Incorporating helps just in case the business goes bust, it doesn't reflect on your personal credit, and vice versa, if personally you become broke, they don't take the business to pay debts.
However, it is difficult to get grants without a third party supplier who will take a percentage of the grant money for their help, and they require alot of time, energy, money, upkeep, book keeping and legistics.
If I were you this is what I would do...
Apply for a DBA (Doing Business As..) title for your company name. In the US it runs around $25. Then apply for a Tax Id. Get insurance (I believe Equity over there is a decent provider) and start small. Open a business bank account (preferably checking). Everytime you make money, put it in the bank. Everytime you spend money related to the business do it through a check card or paper checks. This allows you to maintain a strict and recorded paper trail. Just make sure 1/2 the money stays in the bank at all times. This will assure you have enough money come tax paying time. If you want to apply for a grant, go the 3rd party route. It is worth the small percentage they take out. Keep in mind that grant MUST BE SPENT on tools, education and such for the art specified. Keep everyting all together...a booking calendar, your account book with receipts/stubs, etc. Do alot of self-promotion as this helps to cut down initial costs.
When doing things for No-Profit, make certain that you have statements signed by the owners of the org. you work with that state what you are doing is a charitable donation, and to what amount because then it can be used as a tax write off.
I have worked setting up 3 of these and am now on my 4th, all with great success. It is alot of work and research but well worth it. And if you start out small and it grows, then you will be in a better place to apply for nfp status..and even maybe have backing from outside sources to help you do so.
Best of luck, keep us posted how it goes!
P~