by Lesley Hames | Sep 9, 2018 | Societies and Charities Articles |
A practical problem, and not uncommon We are quite frequently asked by members of incorporated societies for advice about a problem which is not uncommon – a society which is unable to find anyone willing to stand for office as chairperson, secretary or treasurer, and where the constitution does not outline what should be done in those circumstances (and few society constitution do so). Most society constitutions provide that these positions are to be filled by people elected from the membership and may provide for the co-option of people to fill vacancies. However, finding volunteers to stand for election or for co-opted appointment is often difficult, and few society constitutions provide any solution in the absence of volunteers willing to take office. In addition, of course, it is sometimes difficult even to find enough people to form the size of committee prescribed in a society constitution. If an incorporated society fails to comply with its constitution by failing to elect officers (or the number of people required to form its committee) as prescribed under the constitution then High Court proceedings could be commenced (at considerable expense) to try to find a remedy, and if the society is a charity the failure to comply with the constitution could be the subject of a complaint to Charities Services. Is there a sensible answer to the problem? If a society is unable to elect or appoint enough officers or committee members as required by its constitution and the issue came before the High Court, the presiding judge is likely to look for a practical solution, particularly as ordering the society to...
by Lesley Hames | Jul 16, 2018 | Societies and Charities Articles |
Background This article has been prepared to help trustees of a charitable trust or committee members of a charitable society governing the charity more readily to understand the obligations they assume when appointed or elected. Because committee members of a charitable society are effectively “trustees” of the society they are referred to as “trustees” in the balance of this article. A trustee’s first obligation is to become familiar with: The trust instrument establishing the charity (such as the trust deed, or will, or the rules of the charitable society), generally referred to in these Notes as the charity’s constitution, which governs what can and cannot be done, especially the charity’s purposes, The charity’s property and records, Any limitations to which the charity is subject, The charity’s strategic plan and policies (which must always be consistent with the charity’s purposes), and then Never to forget the purposes and terms of the trust. It has been said that too many trustees accept appointment without fully understanding that being a trustee involves serious and onerous duties and a commitment of potentially significant time. Being a trustee may be a complex burden, involving not only an understanding of the trust but also being acquainted with relevant legal rules and principles. This article may help to redress those deficiencies, but it is of limited value for two reasons. First, this article is not specific to the circumstances of any particular charity and, second, the detail which may be found in text books cannot be included in such a relatively short article (rather more detailed notes are available to charities which are clients of Bannister...
by Lesley Hames | Jul 8, 2018 | Societies and Charities Articles |
Risks relating to Money Laundering or Financing of Terrorism The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT) is intended to prevent money-laundering by criminals and the financing of terrorism. Societies and charitable trusts (“not-for-profits”) and those providing them with services (such as legal, accounting and banking) are now affected by this legislation: The “risk profile” of a club or society will be assessed having regard to its purpose and size and whether it is a national or local entity. If the organisation has or will have a social or local community focus, such as a sporting or cultural group, the potential risk associated with it is likely to be low. If the club’s or society’s activities are likely to be cash-intensive (with greater potential for it to be used for the placement of illicit money) the risk will be assessed as being higher. The “risk profile” of a charitable trust is considered to be higher because of the potential for trusts to be used to disguise the criminal origin of funds or the true ownership and effective control of the trust, particularly where ownership and control arrangements are sophisticated or complex. As a result, all charitable trusts are subject to what is called “Extended Due Diligence,” and any charitable trusts that are geographically or financially linked to higher risk countries, or include politically exposed persons, may have increased Money Laundering or Financing of Terrorism risks. Lawyers and Accountants Advising Not-for-Profits and Financial institutions providing Not-for-Profits with financial services Before any lawyer or accountant provides a proposed or existing club, society or charitable trust with advice,...
by Lesley Hames | Jun 20, 2018 | Societies and Charities Articles |
2015 Article, updated June 2018 NOTE: These notes, prepared by Mark von Dadelszen QSM, provide an overview of the more significant elements of the proposals to replace the Incorporated Societies Act 1908. The Exposure Draft of the Incorporated Societies Bill released in November 2015 (see http://www.mbie.govt.nz/info-services/business/business-law/incorporated-societies), largely followed the recommendations in the 2013 Law Commission Report 129 (see www.lawcom.govt.nz/project/review-incorporated-societies-act-1908/report). This overview is a much abbreviated summary of the main proposals. We recommend that new and existing societies be proactive in anticipating the reforms when adopting or revising constitutions. The most recent advice w Bill may be introduced in 2019, and enacted in 2020. 1. The Incorporated Societies Act 1908 is badly out-of-date Our companies’ legislation has been totally re-enacted six times in the last 152 years (1868, 1882, 1901, 1903, 1933 and 1993) since the Joint Stock Companies Act 1860, all with regular amending Acts. In contrast, the Incorporated Societies Act 1908, the Agricultural and Pastoral Societies legislation, and the Industrial and Provident Societies Act 1908 have been changed little in over a hundred years, and: Do not reflect current good governance practices, Have been overtaken by technological advances, Are all well past their respective “use-by” dates, and Do not reflect modern legislative drafting. 2. A new Incorporated Societies Act The Government in early 2015 accepted most of the Law Commission’s Recommendations, and the Exposure Draft of the Bill proposed to: Completely replace the Incorporated Societies Act 1908, Provide a clearer statutory framework for society governance, Require better processes for how societies deal with member grievances and complaints, Provide standard constitutional provisions for use by incorporated societies, Transfer charitable societies...
by Lesley Hames | Feb 24, 2018 | BvonD News, Societies and Charities Articles |
Mark von Dadelszen, author of Law of Societies, 3rd Edition, 2013, and Member’s Meetings, 3rd Edition, 2012 Many community organisations reach a point where they ask (or should be asking) this question – does our organisation have a future? Before adopting a negative or defensive attitude to that question it is worth reflecting on some fundamentals: What do we really know about: Our potential and existing members? What keeps existing members interested? How to engage our members? What might attract new members? Would a name-change or a re-focussing of our activities attract new members? The world has changed, and will continue to change In reality, much has changed in the last century – for instance: Early 20th century family: Early 21st century family: Today: People will not necessarily give their time (or have time) for traditional voluntary activities, and Those who have been leaders in community organisations (baby boomers) are retiring Issues for community organisations to consider and: Are new members joining – if not, why not? Are new members leaving after a year or two – is so, why? Are member resignations/deaths increasing – if so, why? Are you struggling to get people to your activities and events – if so, why? Are you battling to recruit quality volunteers – if so, why? Are you having trouble gaining or retaining sponsor – if so, why? Is the average age of your committee members greater than 50? Are other organisations or activities competing for your potential and existing members’ engagement? The self-fulfilling prophecy: Your organisation will be doomed if you sound or act despondent: We can’t get...
