A Comparison between Incorporated Societies and Charitable Trusts
Comparison
Incorporated Socitey
Charitable Trust
Suited to:
Not for profit organisations where members have a common interest (eg sport, hobby & community interest
Not for profit organisations with a charitable purpose (eg education, religion, relief of poverty and other purposes that benefit the community)
Charitable purpose
Charitable purpose
Needs a charitable purpose
Size
Minimum of 15 members
Minimum of two trustees
Decision making
By members at general meetings and by the committee in accordance with the rules
By the trustees in accordance with the trust deed
Members
Who can be a member is determined by the rules
No members – trustees run the trust to benefit beneficiaries
Accountability
Committee accountable to the members
Trustees are accountable to the beneficiaries and must comply with the trust deed and the Trustee Act 1956
Liability
Limited liability – unless members run the society for their own profit (pecuniary gain)
Trustees no liable unless they fail to comply with requirements of trust deed or the Trustee Act 1956
Audit
No – unless required by the rules*
No – unless required by the trust deed*
Profits
Must be used to run the society to achieve its purpose. Profits cannot be distributed to members.
Must be used to run the charitable trust to achieve its purpose.
How to incorporate
Send applications to the Registrar.
An application form with:
- one copy of the rules
- rules certification
- NZ$102.22
Send applications to the Registrar.
- An application form
- a copy of the trust deed or rules
- statutory declaration
Maintaining registration after incorporation
Send this information to the registrar:
- Annual Financial Statements
- Rule changes (including names)
- Change of contact details
Send this information to the registrar:
- Rule changes (including names)
- Change of contact details
Winding Up
According to the rules – surplus assets can be distributed amongst members
According to the trust deed – surplus assets must be distributed to other charitable organisations
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