Other legal structures

As well as incorporated societies and charitable trusts, some groups may want to consider other alternatives: companies and Māori Land Trusts. 

Company

While companies with charitable or non-profit tax status are not commonly used by community groups, they can be particularly useful where the group is likely to be involved in significant business activities or business activities that are not related to the group's core purposes. Groups intending to register as a company should seek legal advice.

Some common characteristics of groups incorporated under the Companies Act 1993 for charitable or non profit purposes are:

• Will have charitable or other community purposes stated in its rules along with other special provisions restricting personal benefit to those involved.
• Will need to be registered by the Charities Commission to be eligible to an income tax exemption and gifts by donors to be exempt from gift duty.
• Could have directors appointed by individual members and/or other community group
• Shareholders are not personally liable beyond the value of their shareholding unless they give personal guarantees
• Directors have limited liability

Māori Land Trusts

There are five Trusts described in Te Ture Whenua / The Māori Land Act 1993, and each has a different purpose and different rules. All are for Māori landowners and have the primary purpose of keeping Māori land in Māori ownership, while allowing it to be used for the benefit of the people.

The kinds of projects involved may be different from an ordinary Charitable Trust, since they relate to land development as well as the social benefits to Trust members. They are likely to be whānau related or smaller hapü or iwi based projects such as forestry projects, wānanga, kapa haka or culture groups. Ahu Whenua continues land development projects such as horticulture, silviculture, viticulture and agriculture projects.

Common characteristics:

• The process for setting up these Trusts is through an application to the Māori Land Court
• The Trusts are set up under a Trust Deed
• Only the landowners or their agents can set up a Trust
• The Trustees are responsible, advisory, and custodial
• Profit-making activity is allowed
• Decisions are made by Trustees
• They can include shares in a Corporation
• Trusts can only be terminated by the Māori Land Court and are an exception to the rule against perpetuity
• Trusts will need to be registered by the Charities Commission to be eligible for an income tax exemption and gifts by donors to be exempt from gift duty.
• The Māori Land Court oversees the Act and the Trusts have to be registered with it.

For further information on Māori Land Trusts and Māori Authorities contact Māori Land Court (in the Blue Pages ) or go to the information on the Māori Land Court website.