by Lesley Hames | Sep 23, 2019 | Societies and Charities Articles |
Introduction Those involved in the governance of a not-for-profit entity (incorporated society or charity, whether or not incorporated under any statute) have duties and responsibilities: These may be specified in the constitution of the not-for-profit entity, They may be specified in any legislation under which the not-for-profit entity may be incorporated or which applies to the entity, Such duties may have been recognised by a Court, and Some such duties may be ethical. In summary, those in governance need to comply with the law, be totally honest, and apply themselves diligently to their duties. This article does not discuss the details of duties found in statutes, constitutions or Court decisions but, rather, obligations relating to the processes and behaviours usually required of those governing entities. Compliance with duties in statutes, constitutions or Court decisions Consistent with the previous sentence, no reference is made to specific legal duties owed under any statute, constitution or Court decisions, but those in governance are obliged, in good conscience, to comply with their legal obligations. Conduct related to being a “good steward” Collectively, those in governance of any organisation are the temporary custodians of the organisation and are, collectively, expected (by the organisation’s members, but often by others in the community, and by law) to: Comply with their legal obligations and duties, Maintain and improve the good reputation of an entity, and Mostly importantly, advance the attainment of the entity’s purposes. Conduct related to compliance with the law and ethics Individually, those in governance need to comply with their legal obligations (found in the organisation’s constitution and relevant statutes) and their ethical...
by Lesley Hames | Aug 12, 2019 | Societies and Charities Articles |
Not-for-Profits and New Zealand Business Numbers The New Zealand Business Number Act 2016 provides that incorporated societies registered under the Incorporated Societies Act 1908, charitable trusts incorporated under the Charitable Trusts Act 1957, friendly societies and credit unions registered under the Friendly Societies and Credit Unions Act 1982, and industrial and provident societies registered under the Industrial and Provident Societies Act 1908 are eligible to obtain a New Zealand Business Number (NZBN). An amendment to the Incorporated Societies Regulations 1979 and the Charitable Trusts Regulations 2019 (both of which are in force from 30 September 2019) require any New Zealand Business Number under the New Zealand Business Number Act 2016 allocated to a registered incorporated society or charitable trust to be noted on the Register at http://www.societies.govt.nz While having a NZBN may be of more obvious benefit to businesses, the anticipated benefits must also apply to not-for-profits. What is a New Zealand Business Number? The New Zealand Business Number Act 2016 was enacted on 15 April 2016, and most of it came into force in mid-May. A New Zealand Business Number (NZBN) is a unique a 13 digit Global Location Number (GLN) assigned to businesses and other entities, including not-for-profits, in New Zealand and usable worldwide. Use of NZBNs is expected to transform how entities with NZBNs share key information and interact with Government and with each other. Each NZBN is a 13 digit Global Location Number (GLN). What are the benefits of NZBNs? According to Economic Development Minister Steven Joyce (and his quoted comments should apply to not-for-profits): “NZBNs are a key initiative of the Government’s Better for Business...
by Lesley Hames | Jun 28, 2019 | Societies and Charities Articles |
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. This overview is a much abbreviated summary of the main proposals approved by cabinet in late June (Reform of the Incorporated Societies Act 1908). The Exposure Draft of the Incorporated Societies Bill released in November 2015 (see Incorporated Societies), largely followed the recommendations in the 2013 Law Commission Report 129 (see Incorporated Societies Act 1908 Report). We recommend that new and existing societies be proactive in anticipating the reforms when adopting or revising constitutions. The most recent advice we have is that a Bill may be introduced in 2019, and enacted in 2020. Incorporated Societies Act Reform The Minister of Commerce and Consumer Affairs hopes the reform Bill will be introduced to Parliament by the end of 2019. The following is a brief background to the reform: The Incorporated Societies Act 1908 has effectively remained unchanged for over a century (in 1920 it was amended to allow for branch societies, and on the introduction of decimal currency in 1967 a shilling fine was changed to 10 cents). In contrast, our companies’ legislation has been totally re-enacted six times since the Joint Stock Companies Act 1860 (1868, 1882, 1901, 1903, 1933 and 1993), all with regular amending Acts. The Law Commission’s 2013 Report 129, A New Act for Incorporated Societies, recommended a complete overhaul of the Incorporated Societies Act 1908. A 2015 Exposure Draft of the Incorporated Societies Bill largely followed the recommendations in the 2013 Law Commission Report. In a 26 June...
by Lesley Hames | May 27, 2019 | Societies and Charities Articles |
Introduction Most not-for-profit organisations (societies and charitable trusts, abbreviated to N-f-P’s in these notes) are governed and managed by well-intentioned, honest people, but many of those people lack some or all of the knowledge and skills about the decision-making and record-keeping required in such an organisation. The sections that follow provide a brief guide to help get people started, but, first, some preliminary advice: What follows is only a brief overview of the essential requirements for good N-f-P record-keeping, and: It may be helpful if every incoming N-f-P Committee is provided with some basic training in governance, and An N-f-P may be well-advised to engage someone to provide such hands-on training or to advise the secretary and treasurer (or, possibly, to be responsible for some specific tasks). Where an N-f-P is incorporated under a statute (such as the Incorporated Societies Act 1908 or Charitable Trusts Act 1957) it gains the benefits of being an incorporated entity, and: The statute under which it is incorporated sets out general requirements for the entity’s governance, management and operations (as noted below, there may be some other statutes applicable to some of the organisation’s activities), It follows that those in charge of the entity need to be aware of and understand that legislation (noting that penalties may be imposed on people who fail to comply with the requirements in applicable Acts of Parliament), and There are annual reporting obligations (for instance to the Registrar of Incorporated Societies or to Charities Services), and Both the Registrar and Charities Services must be provided with details of a registered office (a physical address, not a P...
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...
