Community organisations and the law
Forming and running a not-for-profit organisation
What this chapter covers
This chapter discusses some of the key legal issues that organisations working in the community (not-for-profit) sector will need to be aware of.
It’s aimed in particular at people who:
- are planning to set up a new community group, or
- are reviewing how their existing community group is structured and organised, or
- are involved in managing an existing community group and want information about their group’s legal powers and obligations.
The chapter focuses on some central questions you’ll need to consider if you’re setting up a new group or reviewing your existing group’s structure and organisation – namely:
- What do you want to do?
- Should your group seek charitable status?
- What kind of legal structure should your group have?
- What other laws will you need to know about?
These four key issues are summarised below (see “Overview and key terms”). The rest of the chapter then discusses these issues in more detail.
The “Key terms and definitions” section below explains the terms used in this chapter and in the community sector generally.
The organisational forms this chapter focuses on
This chapter discusses the different organisational forms that a community group might adopt, but focuses on those that are most relevant to the community sector. For example, it gives only a short summary of the law relating to companies, as these are less common in the community sector. Also, while some of the information about trusts is also relevant to private trusts (such as family trusts), the chapter focuses on trusts with charitable status and on other community-based trusts. Māori land trusts are specifically covered in the chapter “Māori land” (under “Methods of managing Māori land: Trusts, incorporations, and reservations”).
Those wanting more detailed information about companies and private trusts should see “Other resources” at the end of this chapter.
Note: A new bill to replace the Incorporated Societies Act 1908 is going to be introduced to Parliament, probably in 2018, and this will involve some significant changes for many community groups. The proposed changes originated in a 2013 Law Commission report, “A New Act for Incorporated Societies”. Based largely on that report, the government released an Exposure Draft of a new bill in late 2015 and has now considered the submissions it received in response to that draft. The government has said it expects to introduce the bill in 2018 and to pass it in 2019, with the new Act then coming into force in two stages, probably in 2021 and 2023.