Doing good deeds through Charities & Incorporated Societies can sometimes be a minefield if you don’t set up your systems properly. Creating an organisation for the benefit of others requires specialist knowledge and at Canterbury Legal we understand all the pitfalls that can lie in hiding for the unsuspecting.
Canterbury Legal works with a number of charitable organisations to ensure they are compliant with their governing and reporting obligations, and provide peace of mind to those volunteers donating their time to help.
- A charitable trust must have been formed for a charitable purpose to be eligible for registration. Charitable purposes are generally for the public benefit and include education, religious activities, recreational and leisure-time facilities and welfare relief from poverty;
- Charitable trusts are administered by trustees. There must be at least two trustees who must act in accordance with the trust deed.
- Trustees are not personally liable provided they comply with their legal requirements. They are accountable to the beneficiaries described in the trust deed;
- Profits must be used for the charity and cannot be distributed to the trustees. A non-profit tax exemption may be available from Inland Revenue;
- There are administrative advantages in the trustees incorporating as a charitable trust board as the board will hold trust assets and any liability attaches to the board rather than to the trustees;
- Charitable trusts must be registered with Charities Services.
- An Incorporated Society may have a charitable purpose and are generally formed to accommodate members of a common interest group. These include all sports, hobby groups and other community interests;
- Incorporated Societies are governed by a Committee which is usually elected by their members in terms of their Rules. There must be at least 15 members;
- Incorporation will provide limited liability to the members unless they are using the society for their own personal financial advantage;
- An Incorporated Society operating in a number of places may establish branch societies;
- On a winding up assets may be distributed amongst members if such is allowed by the Rules.
If you need advice or assistance in either setting up a Charitable Trust or Incorporated Society or with compliance or governance of an existing body please call Clive to discuss your requirements.