Charities/NFP - Parry Field Lawyers

Climate-Related Disclosures: How this change will affect governance

In January 2023, the External Reporting Board (XRB) issued a framework of Climate Standards to facilitate the aim for Aotearoa New Zealand to ensure capital is allocated to activities which promote the transition to a low-emissions and climate-resilient future. To foster this objective it produced three climate-related disclosures (NZ CS 1, 2 and 3) for some entities to comply with.

In this article we breakdown the requirements because while currently it applies to the largest companies, it is likely to apply to others in the future as well. This will increasingly impact governance and reporting responsibilities for directors in the future.

NZ CS 1, 2 and 3

The first Climate Standard (NZ CS 1) sets out disclosure requirements for Governance, Strategy, Risk Management and Metrics, and Targets so entities consider how their activities raise climate-related risks and opportunities. It applies to entities that must prepare climate statements, by virtue of the Financial Markets Conduct Act 2013, to comply with the framework.

The second climate-related disclosure standards (NZ CS 2) allows for exemptions from the disclosure requirements to recognise that high-quality disclosures will likely take time to develop. Entities may use adoption provisions 1 to 4 (see exemptions underlined) under the NZ CS 2 during their first reporting period. Entities in their first, second and third reporting period can use adoption provisions 5 to 7 (see exemptions in italic underlined) and provisions 6 and 7 are available to entities who have previously prepared climate statements but not in the immediately preceding reporting period.

Under NZ CS 1 entities are required to disclose the following for each area:

Governance

The governance body responsible for overseeing climate-related risks and opportunities along with a description of their role and the body’s: processes, frequency of being informed, skills and competencies available to give oversight, way of considering risks and opportunities when implementing strategies and how it oversees the achievement of metrics and targets;
The management’s role in assessing and managing climate-related risks and opportunities, including how responsibilities are assigned to management-level positions/committees and when and how they engage with the governance body.

Strategy

The entities’ current climate-related impacts (physical, transition and financial);
The scenario analysis used to identify climate-related risks and opportunities and its business models’ resilience, including how it analysed 1.5 degrees Celsius, 3 degrees Celsius or greater, and a third climate-related scenarios.
The short, medium and long-term climate-related risks and opportunities and its links to strategic and capital plans, and decision-making processes around funding;
Anticipated impacts, including financial impacts, of climate-related risks and opportunities the entity reasonably expects;
Information regarding its current business model, strategy, business plan, internal capital deployment and decision-making to show how it will arrange itself while the global and domestic economy moves toward a low-emissions, climate-resilient future.

Risk-Management

Processes for identifying, assessing and managing climate-related risks and how these are integrated into its overall risk assessment processes by describing: the tools/methods used to identify and assess the scope, size and impact of the risk (and how frequently this is done), the short, medium and long term horizons, how the entity prioritises climate-related-risks in relation to other risks, and whether parts of the value chain are excluded.

Metrics and Targets

Relevant metrics of: gross greenhouse gas emissions (including standards used to measure this, the approach used, the sources of emission factors and global warming potential) and its intensity, transition and physical risks, the amount of assets, business activities, expenditure, financing, investment or remuneration aligned with or used toward climate-related opportunities and risks, and internal emissions prices;
Relevant industry-based metrics of the entities’ industry or business model, as well as other performance indicators, used to measure and manage climate-related risks and opportunities;
The targets used, and their performance, to manage climate-related risks and opportunities including information about timeframes, interim targets, the base year to measure progress from, descriptions of performance, and for each greenhouse gas emissions target: whether they have an absolute or intensity target, how it contributes to global warming to 1.5 degrees Celsius (and its basis for determining this), and the extent the target relies on offsets (and how these are verified);

NZ CS 3 sets out the following principles and general requirements to provide for high-quality climate-related disclosures:

Disclosures must achieve a fair presentation by meeting NZ CS 3 principles;
Disclosures must be relevant (i.e. capable of affecting primary users’ decisions), accurate (free from material error), verifiable (possible to corroborate information), comparable (enables primary users to understand similarities and differences in and among items), consistent (uses the same method from each reporting period), timely (available for primary users to make decisions in time);
The presentation of disclosures must be balanced (free from bias and manipulation), understandable (with clear and concise information), complete (does not leave out details that may result in information being false or misleading), coherent (presentation of disclosures explains context and relationships with other disclosures);
Disclosures may be prepared as a specific document or included within other documents such as annual reports;
When determining its climate-related risks and opportunities an entity is to consider the exposure of its value chain too (the range of activities, resources and relationships of an entity’s business model and external environmental it operates in);
Entities are to prepare climate-related disclosures for the same reporting period as its annual financial statements and use the same presentation currency that is in their financial statements;
Information must be disclosed where it is material (i.e. if leaving it out or obscuring it may reasonably influence primary user decisions);
Comparative information is to be disclosed for each metric for the immediately preceding two reporting periods and their trends, and changes to the methods of disclosure are to be explained to enable consistency;
Entities are to disclose their methods, assumptions and data and estimation uncertainty as well as methods, assumptions and limitations of methods to estimate greenhouse gas emissions;
Entities who comply with the Aotearoa New Zealand Climate Standards are to have a statement of compliance.

Exemptions under NZ CS 2

Entities who are in their first reporting period may adopt provisions 1 to 4 to be exempt from disclosing:

The entities’ current financial impacts of physical and transition climate-related impacts under paragraph 12(b) of NZ CS 1 (see ‘Strategy’ above).
Anticipated financial impacts of climate-related risks and opportunities the entity reasonably expects under paragraph 15(b) of NZ CS 1 (see ‘Strategy’ above).
Information regarding its current business model, strategy, business plan, internal capital deployment under paragraphs 16(b) and 16(c) of NZ CS 1 (see ‘Strategy’ above).
Gross greenhouse gas emissions under paragraph 22(a)(iii) of NZ CS 1 (see ‘Metrics and Targets above).

Entities who are in their first, second or third reporting period may adopt provisions 5 to 7 to be exempt from disclosure of:

Comparative metric information for immediately preceding two reporting periods under paragraph 40 of NZ CS 3, where entities have used adoption provision 4 above they are exempt from greenhouse gas emission metrics in second and third reporting periods (see NZ CS 3 principles above);
Comparative metric information disclosure for the immediately preceding two reporting periods under paragraph 40 of NZ CS 3 for entities in their first reporting period are only required to provide one year comparative information in their second report period (see NZ CS 3 principles above);
Comparative metric trend analysis from previous reporting periods to the current reporting period where entities are in their first and second reporting periods (see NZ CS 3 principles above);

Entities who have previously prepared climate statements but not in the immediately preceding reporting period may use adoption provisions 6 and 7 above too.

If you have any further queries please do not hesitate to contact one of our experts at Parry Field Lawyers- stevenmoe@parryfield.com, yangsu@parryfield.com, sophietremewan@parryfield.com, michaelbelay@parryfield.com or annemariemora@parryfield.com

This article is general in nature and is not a substitute for legal advice. You should talk to a lawyer about your specific situation. Reproduction is permitted with prior approval and credit being given back to the source.

Trustees have important duties. If a trustee lose their mental capacity and cannot perform their trustee duties, action is needed in the best interests of the trust, and arguably in the best interests of the trustee themselves. So what happens?

What is meant by ‘loss of capacity’?

The Trusts Act 2019 (the Act) does not define what this means (except when it refers to people who are subject to an order appointing a manager under the Protection of Personal and Property Rights Act, or has a trustee corporation managing the person’s property under that Act).

Broadly speaking and depending on the circumstances, a trustee will have lost capacity if they do not have the capacity to make the future decisions required for their role as trustee. It is also useful to be aware that ‘capacity’ has been interpreted by the courts in numerous ways, depending on a variety of circumstances, including what the affected trustee is responsible for doing.

In New Zealand people are presumed to have mental capacity until proven otherwise. We suggest that only an appropriately qualified medical practitioner can truly make this evaluation. Not only is a medical practitioner’s decision authoritative, it is made independently from other trustees.

What needs to happen if a trustee loses capacity?

There may be negligible or substantial risks attached to an incapacitated trustee remaining in office. The more substantial the risk, the greater the need for action. Those affected by a trustee’s decision-making may need to be protected from potentially imprudent decisions, for example.

A trustee may or may not recognise that they have lost or are losing their capacity. If they do not recognise this and fail to remove themselves from the role, it falls to others to act.

The law is clear

The Act recognises the necessity of dealing with this issue. Anyone who “lacks the capacity to perform the functions of a trustee” is legally disqualified from being a trustee. Furthermore, a trustee who lacks capacity is legally required to be compulsorily removed from the role by the ‘person with power to remove trustees’ to act to remove them.

Who is the ‘person with power to remove trustees’?

The Trust Deed will normally state who has this power, and failing that, the other trustees are empowered to act. If the trustees are unwilling to act, a person holding an enduring power of attorney over the property of the trustee who is mentally incapable may act. Other options are set out in the Act.

What is the process for removing a trustee?

In most circumstances you can follow the process set out in your Trust Deed, or the process set out in the Act. If you are following the Act, you must give the affected trustee 20 working days’ notice in writing of their removal.

The affected trustee may make an application to prevent their removal within 20 working days of receiving notice of the removal decision. The affected trustee will need to produce evidence that raises a genuine dispute as to whether the removal decision was open to the person who made the decision. If the court finds that this evidence is sufficient, the onus then returns to the person who made the decision to remove the trustee to show the decision was reasonably open to them. (That is why it is advisable to have a reputable medical evaluation.) We recommend seeking legal assistance if things reach this stage.

How to give notice to a trustee

So many issues can be avoided by choosing the correct words. Our rule of thumb is to treat a trustee who has lost their capacity as you would like to be treated in the same circumstances. Although you are acting to remove the trustee, compassion is recommended as it is likely to minimise any unintended offence.

What if an incapacitated trustee refuses to leave?

The law makes provision for this situation because unfortunately it does arise—the court may make an order for removal. We suggest you seek legal assistance in this situation.

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This article provides an overview but it is not a definitive guide. For further assistance, please contact one of our team. You may also find this article about Enduring Powers of Attorney of interest.

If you have any further queries please do not hesitate to contact one of our experts at Parry Field Lawyers- stevenmoe@parryfield.com, yangsu@parryfield.com, sophietremewan@parryfield.com, michaelbelay@parryfield.com or annemariemora@parryfield.com

This article is general in nature and is not a substitute for legal advice. You should talk to a lawyer about your specific situation. Reproduction is permitted with prior approval and credit being given back to the source.

Raffles are a common way to raise money for worthy causes. What may surprise you is that there are laws that govern how raffles need to be run. For example, it is illegal to run a raffle online. It pays to be aware of the rules before organising a raffle. Here are some important things to know.

Where are the rules?

The laws around raffles are found in the Gambling Act which exists among other reasons to ensure the integrity and fairness of games, and ensuring that money from gambling benefits the community. It’s useful to keep in mind that these laws are not there to make life difficult but to guard against improper use of funds.

What can raffles be used for?

The raffle proceeds can be used for a charitable purpose, or a non-commercial purpose that is beneficial to the whole or a section of the community. So raising money for a registered charity is fine, as is raising money for the local football club. It is not acceptable for someone to run a raffle to raise money so they can go on holiday or buy a new laptop.

What prizes are permitted?

Most prizes will be fine to raffle. However, alcohol and tobacco products prizes are illegal, as are firearms, explosives, restricted weapons or airgun. It is also illegal to offer a taonga tuturu as a prize (an object over 50 years old that relates to Māori culture, history or society and was manufactured, modified, used or brought into New Zealand by Māori), or a voucher or entitlement to commercial sexual services.

A licence is sometimes needed

Most small raffles are pretty straightforward to run. However, if the combined value of prizes is more than $5,000, and the turnover (the money raised) is more than $15,000, a Class 3 licence is needed. Apply for a licence on the DIA website.

What’s involved in a Class 3 licence?

Among other things, there are special requirements for what needs to be on the tickets. The prize needs to be worth at least 20% of the prize’s ‘gross potential income’ (which is the amount you expect to raise, calculated by multiplying the number of tickets by the cost of each ticket). Within 3 months of the raffle finishing the organisers must provide an audited Audit and Prize Statement to the Secretary. More information is set out on the DIA website.

Other rules

Even if you do not need a licence, there are other rules to be aware of, including:

The rules for the competition must be clear to all participants.
If tickets are sold to the general public, the time and location of the prize draw must be open to the public.
Prizes can only be given to winners and must be given to winners within 3 months of the result, unless the winner cannot be identified or located or does not accept the prize. Prizes cannot be changed once the raffle has started.

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This article is general in nature and is not a substitute for legal advice. You should talk to a lawyer about your specific situation. Reproduction is permitted with prior approval and credit being given back to the source.

As you may know, all incorporated societies in New Zealand must re-register under the new Incorporated Societies Act 2022 (the “new Act”). If this is news to you, we have written an article about it here.

The new Act requires a society’s name to end with either ‘Manatōpū’, ‘Incorporated’ or ‘Inc’ (or more than one of these if you so wish). However, to change your society’s name, even just one word, you must reregister first then apply to the Registrar for a name change.

To change the name of your society, you need a RealMe® login, an Incorporated Societies Register online services account, and you need the requisite authority in your society to manage information on your society’s register. You need to log into your online services account and select ‘Name Change’ on the ‘View Details’ page and type in the new name. You may click ‘Name availability check’ to make sure you can use the name. If there are any documents in support of your name change (i.e. if another entity has provided consent for you to use the name) you should include these. Then, after completing the signatory details you can submit it. See Companies Office for more information about naming your society here.

The Registrar must then approve the name and will send an email confirmation that they have registered the change within three working days. An updated Certificate of Incorporation will be sent to you. You do not need to update your society’s constitution as it will be treated as having the new name; however, this should be done in your next general meeting.

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We have supported many incorporated societies and produce many free guides and resources on our Incorporated Societies information hub here. This article is not a substitute to legal advice and if you have any questions please do not hesitate to contact our experts here at Parry Field Lawyers.

We help with unincorporated and incorporated societies and answer questions all the time. If you would like to discuss further, please contact one of our team on stevenmoe@parryfield.com sophietremewan@parryfield.com or annemariemora@parryfield.com.

Payroll giving occurs when employers enable their employees to make donations directly from their gross wages. The tax benefit is that the amount of PAYE or withholding tax the employee pays is reduced by the amount of their donation. They also receive a ‘tax credit’ from the donation, which is 33.3% of the donation value.

Payroll giving is therefore a bit simpler than making a donation directly to a charity as donors do not have to submit their donation receipts to IRD to claim the tax credit.

What needs to be in place for payroll giving?

Employers will only be able to offer this service if they file their payroll taxes electronically. They can either use the myIR online service, or attach files from their own payroll software.

Even if an employer has the ability to use payroll giving, it is discretionary. Employers may also use their discretion to choose how the donations will operate, for example, they may designate specific charities that can be donated to, and they may designate a minimum donation amount.

Only ‘tax donee’ organisations can receive payroll donations.

What is a donee organisation?

IRD maintains a list of donee organisations. Charities are added to the list if they use at least 75% of their funds within New Zealand (that is, they operate “wholly or mainly” here), or for the public good if an organisation is not a charity. For more on the threshold, you can check to see if a charity is on the IRD donee organisation list here.

Other resources

The IRD has put together this excellent guide to payroll giving.

It is also possible to claim tax credits on donations to charities supporting overseas causes.

This article is general in nature and is not a substitute for legal advice. You should talk to a lawyer about your specific situation. Reproduction is permitted with prior approval and credit being given back to the source.

If you would like to discuss further, please contact one of our team, stevenmoe@parryfield.com, or annemariemora@parryfield.com at Parry Field Lawyers.

We are often asked when a charity will be registered after applying to Charity Services. This is because the time between applying and getting positive news can be 12 weeks, or more. The simple answer is Charities Services can backdate to when you first applied, but there are two criteria under section 20 of the Charities Act 2005 (the Act) that must be considered. These might affect if they can backdate and are:

When did Charities Services receive a “complete” application?
Was the entity “qualified for registration” as a charitable entity at all times during the period between the effective registration date and the date the entity became registered as a charitable entity?

A completed application requires a completed application form and a copy of the entity’s legal rules. An entity is “qualified for registration” where the application meets all key registration requirements under the Act. This could have an impact on the date. For example, if an entity was required to amend its rules to meet these requirements, then Charities Services can only backdate the registration date to the date of these amendments were legally effective. However, the High Court has allowed the backdating of an application where such amendments were “for the avoidance of doubt”.

Charities Services have the power to backdate an application to the date they received a complete application for an entity that is qualified for registration at all times from the period of effective registration and the date of actual registration. A backdated registration is referred to as the effective registration time, being the date registration was effective rather than when it occurred.

The High Court has interpreted the Charities Services ability to backdate as a means of addressing the otherwise adverse consequences for charities of administrative delays. However, this discretionary ability was not found to extend to charities that have been deregistered and have applied for another application to be registered. The Court, alternatively, does have the power to do so. This means that if a charity wishes to have a backdated registration following deregistration it would need to appeal to the courts for an order to do so.

In summary, while most applications can be backdated if you are asked to amend your documents it may not be possible unless the changes are not very material. We have helped many charities get registered and are happy to provide advice for your specific situation or answer any questions you may have.

If you have any further queries please do not hesitate to contact one of our experts at Parry Field Lawyers- stevenmoe@parryfield.com, sophietremewan@parryfield.com, michaelbelay@parryfield.com or annemariemora@parryfield.com

This article is general in nature and is not a substitute for legal advice. You should talk to a lawyer about your specific situation. Reproduction is permitted with prior approval and credit being given back to the source.

As a charity your models have been built on a foundation that people who want to support doing good will do so by giving you money. The binary approach we all grew up with in our culture is:

In other words, people will give you some of their profits out of their excess: the success of their companies or investments, to support your good works.

The philanthropic sector is often based on a scarcity mindset. It relies on generosity from those with the ability to give, also usually involving a power imbalance, resulting in a “Please, sir, I want some more”, approach, like in Oliver Twist.

I’m pleased to say that an important paradigm shift in this thinking is here, though it is like an incoming tide or a sprouting seed. Both take time for change to be seen, but can deliver better outcomes for everyone.

The ingredients for a different recipe are worth considering and ask yourself this: how might this new way of thinking change your approach to funding your next blue skies project?

The end result could be positive in one of two different ways:

First, as an organisation you create a structure that others can invest in; or
Second, you invest some of your funds in a venture that aligns with your mission.

Impact investments can be through debt (loans) or equity (shares). So, what are the ingredients?

By Steven Moe

Head of Impact Team at Parry Field Lawyers

stevenmoe@parryfield.com 021 761 292

LinkedIn here

What is the minimum age of a trustee?

We often get asked about whether a young person can become a trustee. There are a few points to consider which we are going to go into here. The minimum age of a trustee is 18 years old under the Trusts Act 2019 (Trusts Act) under sections 15 and 20. However, the minimum age of an officer of a charity is 16 years old, as long as one of the trustees of the charity is at least 18 years or older.

How does this work?

An officer in relation to a charitable entity is someone in a position of significant influence over substantial decisions of the entity. It includes trustees of a trust, a member of a board, and a person occupying any other position that allows them to exercise such influence.[1] It also includes a person with powers conferred on them to make decisions which would otherwise fall to trustees, members of the board or the entity’s governing body.

Charities Services has stated that any person under the age of 16 is disqualified from being an officer under section 36B of the Charities Act 2005 (Charities Act). This acknowledges that people of 16 or 17 years of age can partake in charitable work as an officer. Charities are still required to have at least one officer that is 18 years or older as an essential requirement under section 13 of the Charities Act. The difference in age requirements for trusts and charities comes down to the responsibilities in each role, specifically in entering contracts and holding property.[2]

So, where someone of the age of 16 or 17 cannot be a trustee of a trust they may be an officer of a charity if there is at least one officer that is 18 years or older at any given time.

What does this mean for charitable trusts?

Where a charitable organisation wishes to be a charitable trust, the officers all need to be 18 or older to comply with the Trusts Act. If the charity wishes to be an incorporated society, they require one person that is 18 years old or older to be the contact person.

How about for an incorporated society?

Incorporated societies allow under 18-year-olds to be officers provided they are not under the age of 16 years of age.[3] However, the Incorporated Societies Act 2022 requires every society to have at least 1 contact person who is at least 18 years of age.[4]

How about for a charitable company?

The Companies Act 1993 provides that anyone under the age of 18 are disqualified from being a director of a company. The Charities Act 2005 confirms that individuals that are disqualified under the Companies Act are also disqualified from being officers of charitable entities also. This means directors of charitable companies must be 18 years or older.

We have supported many charities and produce lots of free guides such as the Charities in New Zealand Legal Handbook. If you have any further queries please do not hesitate to contact one of our experts at Parry Field Lawyers- stevenmoe@parryfield.com, sophietremewan@parryfield.com, michaelbelay@parryfield.com or annemariemora@parryfield.com

This article is general in nature and is not a substitute for legal advice. You should talk to a lawyer about your specific situation. Reproduction is permitted with prior approval and credit being given back to the source.

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[1] Charities Act 2005, s 4 meaning of “officer”.

[2] Contract and Commercial Law Act 2017, s 86.

[3] Incorporated Societies Act 2022, s 47.

[4] Incorporated Societies Act 2022, s 113-114.

ChatGPT is a chatbot that was released in November 2022 and it has certainly got people talking. Some say it heralds the demise of lawyers, among other professionals, because of its ability to answer questions and draft documents. We tested it for ourselves and while we believe it does have implications for lawyers, we do not recommend doing away with your legal advice just yet.

A chatbot uses artificial intelligence to simulate human conversation using a large language model, in this case text. Our instruction to ChatGPT was: “Draft a Trust Deed for a New Zealand charitable trust.”

The chatbot’s response was partly correct but overlooked critical details needed to make the document legally valid. It ignored the need for a ‘donor’, the person who creates the trust. It failed to stipulate that Trustee signatures need to be witnessed, which is fundamental to the deed being in the proper form. It included only some of the mandatory duties of Trustees. Overall, it performed at a 5/10, but as the document generated would not be legally binding, it was a ‘fail’. In reality, people can already find better templates for charitable trust deeds using a standard internet search.

We also asked ChatGPT: “Is it better for my organisation to be an incorporated society or charitable trust?”

The chatbot set out some of the differences and similarities but wasn’t overly useful. A much more useful comparison is already available, for example, on our website: https://www.parryfield.com/incorporated-societies-vs-charitable-trusts/

Of course the question was a trick one because we did not provide any details of the organisation and each organisation is different. ChatGPT cleverly noted this at the end of its answer: “Ultimately, the choice …… will depend on the specific needs and goals of your organisation. It is advisable to seek legal advice and consider all relevant factors before making a decision.”

We couldn’t agree more. Our team has helped countless clients with exactly this question because it can be confusing. Our legal advice is based on decades of experience across hundreds of organisations and all entity types. At this stage it is only real-life lawyers who can elicit from clients the critical information to advise on the best entity type.

Our verdict

ChatGPT does not purport to provide legal advice. It acknowledges its limitations including that it may occasionally generate incorrect information or produce harmful instructions or biased content.

However, ChatGPT is just one AI tool. The legal profession has already embraced AI for things like contract reviews, research and document discovery. In a legal first in 2022, an AI start-up in the United Kingdom was used to sift through hundreds of documents in a murder trial saving the legal team four weeks.

AI offers enhanced efficiency and might just free lawyers up from many of the repetitive and mundane tasks they currently undertake, which could be good for lawyers and clients. However, it is a little while before it is advisable to hand over real legal challenges to an AI ‘lawyer’.

We recently helped to edit a collection of essays on the topic of AI and the law for The Law Association which you can download here.

This article is general in nature and is not a substitute for legal advice. You should talk to a lawyer about your specific situation. Reproduction is permitted with prior approval and credit being given back to the source.

We help with charity set ups and answering questions all the time. If you would like to discuss further, please contact one of our team on stevenmoe@parryfield.com, michaelbelay@parryfield.com, sophietremewan@parryfield.com, or yangsu@parryfield.com at Parry Field Lawyers

Why minutes matter

Accurate and thorough board minutes are as critical for charitable entities as they are for companies. Well-written minutes help to ensure charitable entities are legally compliant and assist effective and efficient governance. They are an important record for current, absent and future board members about meeting discussions and decisions as they provide concise summaries of key points discussed.

Furthermore, accurately noting conflicts of interest, identifying documents tabled during meetings, and maintaining a list of action items all help the board to manage its workload and responsibilities effectively, ensuring progress is tracked and necessary actions are completed for future meetings.

Legal Requirements

In New Zealand, different types of charitable entities have specific legal requirements for meeting minutes.

Charitable Trusts: The Trusts Act 2019 requires trustees to keep core documents, including any records of trustee decisions made and any written contracts entered into, which will typically be records in minutes.[1]

Incorporated Societies: The Incorporated Societies Act 2022 stipulates that minutes of annual general meetings must be maintained.[2] Sections 89 allows resolutions to be passed without a meeting, for example, via email, if a society’s constitution allows. Failure to adequately hold and maintain minutes for annual general meetings constitutes an infringement offense, carrying a $500 fee per violation.

Charitable Companies: The Companies Act 1993 requires charitable company directors to maintain detailed minutes of all directors’ and shareholders’ meetings, documenting decisions and resolutions. The Companies Act also requires that minutes be accessible for inspection by directors, shareholders, and regulatory authorities.

What minutes should include

There are numerous templates available for minutes. Our advice is to tailor any template to the needs and preferences of your entity.

The administrative basics.

Start and finish times.
Name of chair.
Name of minute taker.
Attendance: those present and absent, and whether a quorum was established and maintained.
Date, Time, and Location: Schedule and details for the next meeting.

Each agenda item.

Note the item number and topic and keep this consistent with the agenda for ease of reference.
Note key points discussed. Record sufficient detail for people to understand the topic and discussion. Avoid unnecessary detail. Avoid attributing any comment to a particular Board member.
Resolutions: Detail the specific resolutions. We recommend that the chair sit beside the minute-taker and verbalise the proposed resolution for the meeting to hear. This allows meeting attendees to hear what is being minuted, to ensure it is accurate and makes sense.
Good minutes should signal whether something was simply ‘noted’ or ‘resolved’. If something is being tabled for the awareness of the board but does not require a decision, it is enough to note what was tabled and that it was noted. If the board paper has asked the Board to make a decision, the minutes should state that the matter was resolved.
If relevant, note whether voting was unanimous, tied, or whether a casting vote was necessary. (Tip – refer to your entity’s rules to see what is required for decision making.)
Note whether any attendees absented themselves due to a conflict of interest.
Actions: List any actions, who the actions are assigned to, and the date required. It can be useful to list the actions in a separate part of the minutes for easy reference.

Distribution

It is best practice to send the draft minutes to Board members within a week of the meeting, or soon after. Board members should review these while the content is still fresh, and send any proposed amendments to the Chair.

Approval

The approval of minutes should be a standard agenda item for each meeting. At this time, the Chair will ask if any board members have changes to the minutes. The meeting minutes can then be ‘approved’ or ‘approved subject to the changes noted’.

Storage and Accessibility

Minutes must be securely stored while also being readily accessible if required.

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This article is general in nature and is not a substitute for legal advice. You should talk to a lawyer about your specific situation. Reproduction is permitted with prior approval and credit being given back to the source.

[1] Section 45, Trusts Act 2019.

[2] Section 84, Incorporated Societies Act 2022.

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