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What are the differences between incorporated societies and charitable trusts?

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This table provides a quick comparison of some of the key differences between incorporated societies and charitable trusts.

This table provides a quick comparison of some of the key differences between incorporated societies and charitable trusts.

  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 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 – 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 with
  • one copy of the rules
  • rules certification
  • NZ$102.22
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

Last updated 23 December 2011

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