Updated: 11 May 2024
Q: What is the difference between a Charitable Trust and an Incorporated Society? Which is best for me?
The differences are clearly explained on the Registrar of Incorporated Societies website and on this very helpful blog post on the DIA Charities website. The Community Net Aotearoa website has a very helpful table “Characteristics of different organisational legal structures”
Which structure is the most suitable will naturally depend upon your group’s circumstances.
Think of an Incorporated Society as being a membership organisation like a sports club, car club etc, run by an elected committee on behalf of the members. A registered charity is a structured body (such as a trust) which meets the charity test (ie is charitable and qualifies for registration with Charities Services under the Charities Act 2005) and complies with the registration requirements. An incorporated society can also be a registered charity if its purposes meet the charity test; a trust need not be registered as a charity to have a legal status.
The term ‘charitable’ traditionally covers four areas – that is, organisations such as trusts established for:
– advancing religion,
– advancing education
– relief of poverty and
– benefit to the welfare of the community
The law governing Incorporated Societies was recently updated. Societies registered under the 1908 legislation have until 2025 to re-register. Most will need to update their constitutions/rules. Until re-registered, the 1908 legislation applies. Newly registered Societies come under the 2022 legislation
Detailed information about charitable trusts and information about Incorporated Societies are also available on the Registrar’s website and at the Charity Services website. There is also a good article in the Community Law Manual <here>
Our consultant will be pleased to discuss this with you on a no-obligation basis. <contact>
See Also:
Definition of ‘non-profit’, ‘not for profit organisation’, or ‘charity’ – what’s the difference?