Setting up a Charitable Trust
An overview to help you set-up a charitable trust and register it.
This page contains or links to the following information:
A trust is an agreement between people (called trustees) to manage property over which they have control either to benefit other people (called beneficiaries) or for charitable purposes. A groups of trustees may be incorporated as a board under the Charitable Trusts Act 1957 if the objects are charitable.
Some common characteristics of trusts incorporated under the Charitable Trust Act 1957 are:
- has a board of at least two trustees;
- must have charitable purposes;
- has its trustees make the major decisions;
is set up under a trust deed which outlines how it operates;
- often has more limited community or member involvement than incorporated societies;
- its assets can be used to meet its debts, but if it is incorporated and trustees have acted responsibly, they are unlikely to be personally liable;
- Trustees are generally not accountable in specific ways unless the deed specifically set these out;
- it can be legally wound up at any time, unless a specific term for its existence has been stipulated in the trust deed (more common in private Trusts);
- it needs to be registered separately with the IRD to be exempt from payment of tax.
As outlined below in the Flow-chart of steps to registering a charitable trust, once you have decided to set up a charitable trust you need to:
- Develop a set of rules. The Charitable Trust sample rules and guide in the Template section of this How-to Guide give a useful example of trust deed clauses and what they mean.
- Complete the other documentation listed below. These can be printed off and completed by hand.
- Obtain approval for the deed as outlined in the following flow-chart.
Flow-chart of steps to registering a charitable trust
A text version of the flow-chart of the process for setting up a charitable trust is available here.
- Original Trust Deed or a certified copy.
- Application for Incorporation of Trustees as a Board (see 'Charitable Trust Documents' in the 'Templates' section of this 'How To' Guide). The application must be signed by the majority of trustees.
- Statutory Declaration (see 'Charitable Trust Documents' in the 'Templates' section of this 'How To' Guide). The statutory declaration states: whether any Trustees hold any property as trustees for other trusts; that at a meeting of the Trust a resolution was passed approving incorporation; and that the person making the Declaration has been approved by the Trustees to make it.
- You also need to provide the Companies Office with a registered office (this is included in the template Application Form referred to above at 2). Your registered address must be a street address. A postal address may be provided in addition to this.
Some booklets are available from Societies and Trusts Online. Once in the website click on 'Information Library' and the 'Societies and Trusts' section. You can either print the documents or have them emailed to you.
Help on 'how-to' download documents (including PDF documents using Adobe Acrobat Reader) is available on the Download Documents page.