The Differences Between An Incorporated Society & Charitable Trust

SUITED TO

Not for profit organisations where members have a common interest (eg sport, hobby and community interest)

Not for profit organisations with a charitable purpose (e.g. education, religion, relief of poverty and other purposes that benefit the community)

CHARITABLE PURPOSE

Can have a charitable purpose

Must have a charitable purpose

SIZE

Minimum 15 members

Minimum 2 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

Membership requirements determined by the rules

No members – the trustees run the trust to benefit the 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 not 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

- 2 copies of the rules

- rules certification

- $100

Send applications to the Registrar:

- 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