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What are the 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:
|
Send applications to the Registrar:
|
| Maintaining registration after incorporation | Send this information to the Registrar:
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Send this information to the Registrar:
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| 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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Last updated 21 October 2008
