Charities/NFP - Parry Field Lawyers

For-purpose entities – such as charities, trusts, incorporated societies, and other not-for-profits – play a vital role in New Zealand’s social, cultural, and environmental fabric. Whether your entity is updating governance documents, reviewing its structure, or addressing a legal issue, engaging a lawyer can be an important step in ensuring compliance with the law and safeguarding the organisation’s mission and resources. To make the most of this investment, it helps to approach the process strategically. Here are some practical tips for for-purpose groups to consider before engaging legal advice.

1. Review What’s Working (and What’s Not)

Before engaging a lawyer, take time to review your existing documents – such as your trust deed, constitution, governance policies, or operational frameworks. Identify what is functioning well and where you are experiencing challenges. Are there clauses that no longer reflect the way your organisation operates? Are governance roles clearly defined? This internal review allows your lawyer to focus on areas that genuinely require attention, saving time and cost.

2. Engage Early, Not Late

Legal input is most effective when sought early – before you begin drafting changes or responding to a legal issue. Waiting too long may result in duplicated effort or the need to undo work that isn’t legally sound. A brief initial conversation can help your lawyer identify key priorities, assess risks, and ensure your proposed approach is on the right track from the outset.

3. Be Clear and Organised in Your Instructions

When engaging a lawyer, provide clear and detailed instructions. Outline your goals, the context behind any proposed changes, and any concerns you have. Include relevant background materials such as past minutes, correspondence, or current governance documents. The more context your lawyer has, the more efficiently they can provide targeted and useful advice.

4. Keep Focused on the Big Picture

Avoid getting bogged down in minor technicalities unless they materially affect your organisation. It’s important to prioritise the key challenges – such as legal compliance, governance structure, and decision-making authority – that can impact your ability to function effectively. For example, are your governance structures consistent with the Incorporated Societies Act 2022 and/or the Charities Act 2005, or other relevant legislation? Are you meeting your obligations under the Trusts Act 2019? Keeping your focus on strategic matters ensures your legal budget is used wisely. For more information on whether your entity is consistent with the relevant legislation, see our Information Hubs on our website here.

5. Value Quality Over Speed

It’s natural to want to minimise costs, but rushing legal work can lead to oversights that may prove costly down the line. Investing in quality legal advice can help prevent disputes, clarify responsibilities, and ensure your documents reflect both legal requirements and your organisation’s needs. In the long term, this can provide both peace of mind and financial savings by avoiding future legal issues.

Need legal help?

If your for-purpose entity requires guidance on governance, compliance, or restructuring, the team at Parry Field Lawyers can help. We work with a wide range of non-profit and charitable organisations to ensure their structures are robust, lawful, and fit for purpose. Reach out to us for more information.

This article is intended for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please contact a qualified legal professional. Reproduction is permitted with prior approval and credit to the source.

What if our incorporated society doesn’t want to reregister?

The Registrar is encouraging societies that don’t want to reregister to either appoint a liquidator or apply for dissolution (see here). This gives the society more certainty around the wind up process and control over how assets are distributed (which of course needs to be done in accordance with the constitution).

We have helped a number of incorporated societies wind up and are well placed to assist should you wish to do the same – please feel free to get in touch.

What if our incorporated society wants to continue to exist?

If your society wants to continue to operate and doesn’t want to lose control of its assets, then you will need to reregister under the new Act. The biggest step in this process is preparing a new constitution that aligns with the new Act. If you’d like help with this, please feel free to get in touch with our team as we’ve helped dozens of societies with this process.

This article is not a substitute for legal advice and you should consult your lawyer about your specific situation. Please feel free to contact us at Parry Field Lawyers.

Historically, Ministers of Religion, including pastors, were not recognised as employees. Instead, Ministers were seen as having been ‘called’ by God to their role, thereby sitting outside the employer-employee relationship. This meant that the normal employment rules did not apply.

Over time this has changed however, and it is now possible that a pastor may be considered an employee, depending on the ‘true nature’ of the working relationship between the pastor and the church.

This was seen in the recent 2025 Employment Court decision of Bread of Life Christian Church in Auckland v Chen, where the pastor was engaged by a Church charitable trust board, an arrangement that is not uncommon with some church denominations. When he was originally engaged, there was no written agreement but subsequently a fixed-term agreement was signed, alongside a “Call” document, acknowledging his call to ministry. The pastor was paid a salary with PAYE deducted.

When a dispute arose, following termination of the pastor’s engagement, the pastor claimed he was an employee. The trust board said that the pastor’s role was a spiritual contract or calling with the Church, not the trust board, and any relationship between the trust board and the pastor was simply functional for the purpose of paying his salary and deducting PAYE.

The pastor raised a personal grievance and filed a claim in the Employment Relations Authority. The Authority found that the pastor was an employee, and this was upheld by the Employment Court on appeal.

The Court said:

Each church has different structure. No assumption can or should be made that the legal structure of any given church or community is necessarily similar to the legal structure of any other church. In other words, the focus should be on the particular rules and practices of the specific church and the arrangements between that church and its pastor in deciding if a pastor is an employee or not.
There is no presumption against a minister of religion intending to be legally bound, such as via an employment contract. The facts of each case will have to be looked at to decide if the parties did intend to be legally bound or not.
The spiritual nature of a role is important but it is not determinative when deciding if a pastor is in fact an employee. Each case still needs to be considered “on its merits with a focus on the real nature of the relationship between the parties.”

The Court also identified some key factors that indicated an employment relationship which are very useful for all Churches to be aware of, as it could affect the interpretation in their context:

The agreement signed between the parties was consistent with an intent to be legally bound. It had all the ‘hallmarks’ of a contract and was described elsewhere as a contract.
The call agreement did not exclude the pastor from being an employee and there was nothing in it which indicated that the parties did not intend to be legally bound by the other agreement.
The agreement was consistent with aspects of employment law – with the salary based on minimum wage and leave provisions reflecting the requirements of the Holidays Act 2003.
Kiwisaver was deducted from the pastor’s salary, which was more indicative of an employment relationship. The Court accepted however that PAYE deductions occur whether or not a pastor is an employee.
While the pastor had some freedom in his work, the Trust had the power under the agreement to exercise control over him by undertaking performance reviews, reviewing and changing his salary, taking disciplinary action, dismissing him and making decisions about whether to renew his contract or not.
The pastor was required under the agreement to work 40 hours a week and was required to carry out specific tasks on specific days. This further indicated considerable control over the pastor.
The pastor was clearly fully integrated into the life of the church – he was the face of the church to the outside world.
The pastor was clearly not in business on his own account so could not be an independent contractor. He was paid for time worked, not for task completion. He did not bear any risk of loss and had no way of making a profit from any task he carried out, including any work for other churches. While he was not prohibited from delegating his work to others, it was clear he could not do so. Though the church engaged other pastors to preach on occasion, the pastor did not personally subcontract his role to others/pay them to do so.
Finally, the fact he was entitled to repayment of expenses or reimbursement for attending theological courses was consistent with being an employee rather than being in business on his own account.

As every situation will be influenced by the facts relevant to that situation, we are very happy to assist if you are looking to engage a pastor/minister or if you have any questions about an existing engagement.

We also have many free resources available for Church and Community groups such as our Churches Legal Handbook and Charities Health checks – you can find those, as well as videos, articles, and more here.

Under New Zealand’s Incorporated Societies Act 2022 (“the Act”), incorporated societies now have more flexibility regarding governance and decision-making. One area that often sparks questions is whether a society can pay its Committee members for services rendered.
The short answer is yes, subject to certain conditions.

Full Powers Under Section 18 of the New Act

Section 18 of the Act grants societies full capacity to carry out any activity, enter into any transaction, and enjoy full rights, powers, and privileges to pursue their objectives. This includes the ability to pay Committee members for their services, provided that the payments are on arm’s-length terms (as outlined in section 24 of the Act).

Importantly, arm’s-length terms mean that the payment should be reasonable and comparable to what an independent third party would expect to receive for similar services, ensuring that it is fair and transparent.

This means that even if your society’s constitution does not specifically allow payments to Committee members, the society still has the power to make such payments under the Act. However, there are several factors to consider before doing so.

Limits on Power in the Constitution

While section 18 provides a broad power to make payments, it also allows a society’s constitution to restrict or modify this power. For example, many societies choose to require member approval before Committee members can be paid either at a general meeting or through a resolution in lieu, or mandate a (majority or unanimous) resolution from the Board before any payments are made. If your society wishes to exercise full powers under the Act, but restrict payments to Board members, your constitution can specify such conditions.

This allows societies to balance flexibility with control, ensuring that the payment process remains transparent and accountable.

Why Consider Including Payment in Your Constitution?

Even if your society chooses not to restrict its powers and allows for payments to Committee members, it may still be wise to set clear expectations within your constitution and set up a Committee policy on the topic.

This can outline:

When and how payments are made (e.g., for services rendered or as a reimbursement of expenses).
How decisions are made regarding payment.

Best Practices for Transparency and Governance

Setting clear guidelines on the payment of Committee members is essential for maintaining good governance, particularly for registered charities – as noted in the Community Toolkit and a Charities Services article, clear guidance for such payments is crucial. This can help prevent any potential conflicts of interest or mismanagement of funds, and maintain trust with members, stakeholders, and the public.

To ensure your society remains compliant and well-governed:

Update your constitution to clarify whether Committee members can be paid and under what circumstances.
Establish a Committee policy on payments, detailing the process and criteria for making such decisions.
Consider obtaining advice to ensure that payments to Committee members are made in a manner that complies with the new Act, as well as with any other relevant laws or regulations.

Conclusion

The Incorporated Societies Act 2022 provides societies with greater flexibility to manage their internal affairs, including the ability to pay Committee members for services. While the Act allows for such payments on arm’s-length terms, societies are encouraged to clearly define these arrangements in their constitution to ensure transparency, accountability, and good governance.

If your society is considering paying Committee members, or if you need guidance on how to properly amend your constitution, our team is here to assist. There are a couple of different ways we can go about assisting with this, including preparing a draft constitution for you that is based on our template – this also includes a clause on payment of Committee members.

Please note that this article is not a substitute for legal advice and you should contact your lawyer about your specific situation.

There are some accounting points you need to consider when you reregister under the Incorporated Societies Act 2022.

While we are not accountants, let’s look at some key questions and outline some points here. You may also want to review more details at the links below.

Issue 1: XRB reporting

You will need to comply with the External Reporting Board (XRB) reporting standards after reregistering. If you are a registered charity, there shouldn’t be much change, but there are 24,000 incorporated societies and only about 9,000 are registered charities, meaning there will be implications for many societies. Get ready now as you’ll need to comply from when you reregister.

Issue 2: Tiers

Which of the ‘tiers’ will you be in? The reporting requirements will alter depending which you are. In summary, the tiers are:

Tier 1: Total expenses of $33 million or more
Tier 2: Total expenses over $5 million
Tier 3: Total expenses above $140,000
Tier 4: Total operating payments below $140,000

Knowing which tier you are in will help you know how you will need to comply.

Issue 3: Small incorporated societies

These entities have operating payments below $50,000 in last two years and assets below that. If this is the case and they are not a registered charity, there are very minimum standards of reporting to comply with.

Issue 4: Statements of Service Performance

You might need to prepare this – a chance to tell your story well – so check if you will need to change how you report to comply. These are the storytelling aspects of what you do – the lives impacted.

If you have any questions, please feel free to reach out to us, or speak with your accountant. Also be sure to look at the other information available on our Incorporated Societies Information Hub and request a copy of our free guide on reregistering.

If you’d like to know more specifics on the points raised in this article, we suggest taking a look at these links for more on these topics:

– Companies Office guidance

– XRB guidance

– Small societies outline from Companies Office

– Grant Thornton overview

As you may know, all incorporated societies in New Zealand must re-register under the new Incorporated Societies Act 2022 (the “new Act”).

For more information about this, we have written an article about it here.

The new Act mandates that an incorporated society’s name must end with either ‘Manatōpū’, ‘Incorporated’, or ‘Inc’, or a combination of these. However, it is important to note that you cannot simply change your society’s name at the time of re-registration. To change your society’s name, the process involves two distinct steps:

Re-registering your society under the new Act – This process does not allow for an immediate name change, even if the name is only being altered by a single word.
Applying separately for a name change – Once your society has been re-registered, you can then apply to the Registrar of Incorporated Societies for a name change.

An incorporated society cannot simply change its name by re-registering with the Companies Office. This is because, under the Incorporated Societies Act 1908, the process of name change involves more than just administrative paperwork – it is a formal amendment process, which ensures that members are properly informed and consulted. The society cannot bypass this procedure by simply re-registering with a new constitution.

How to Apply for a Name Change

To change the name of your society, you will need to follow these steps:

Set up the necessary accounts: You’ll need a RealMe® login, an Incorporated Societies Register online services account, and the requisite authority within your society to manage the society’s register.
Submit the name change application: Log into your online services account, select the ‘Name Change’ option from the ‘View Details’ page, and enter your proposed new name. You can check if your desired name is available by using the ‘Name Availability Check’ tool. See Companies Office for more information about naming your society here.
Provide supporting documents (if applicable): If any third parties have given consent for you to use a particular name (such as a trademark holder), ensure you attach the relevant documentation.
Complete the signatory details and submit the form for approval.

The Registrar will review the application and, if everything is in order, will approve the name change within three working days. Once approved, you will receive an email confirming the name change and an updated Certificate of Incorporation will be issued.

Importantly, you will not need to update your society’s constitution immediately, as the new name will be considered to be part of your constitution. However, it is advisable to update the constitution at your next general meeting.

Changing Your Name Immediately After Re-registration

While the above outlines the two-step process for a name change, it is possible to include specific wording in your society’s constitution that allows for an immediate name change once you have re-registered under the new Act. This can provide greater flexibility and streamline the process. If you are considering this option, it is best to consult with legal experts to ensure your constitution includes the appropriate provisions.

We have supported many incorporated societies and have 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 are available to help with unincorporated and incorporated societies and can answer any questions you have. If you would like to discuss further, please contact one of our team.

Advocacy has become an increasingly common aspect of charitable work in Aotearoa New Zealand. A frequent question is how far a charity can go before advocacy risks its charitable status by deviating from the definition of a “charitable purpose” under section 5 of the Charities Act 2005.

Can Charities Engage in Advocacy?

In short, yes, charities can engage in advocacy, without automatically jeopardising their charitable status. Charitable and political purposes are not mutually exclusive. This reflects a shift from earlier legal interpretations, where political purposes disqualified an organisation from charitable status unless the purposes were ancillary to a primary charitable purpose.

The change in position came in 2015 with the Supreme Court ruling in Greenpeace. Greenpeace successfully challenged the decision that they did not qualify for charitable status and had their charitable status reinstated. The subsequent decisions in Family First New Zealand and Better Public Media Trust have further brought into focus the New Zealand position on charities and advocacy.

When is Advocacy Considered Charitable?

Advocacy is considered charitable when it clearly aligns with the organisation’s charitable purpose. This can be assessed through the trust deed and the organisation’s actual activities. Relevant factors include:

The end goal being advocated for,
The means used to achieve that goal,
The practical steps taken to advocate for the cause.

A key consideration is whether the organisation promotes its views in a fair and balanced manner. Organisations should therefore ensure their advocacy is not one-sided; opposing views should be acknowledged and considered.

Importantly, advocacy can still be charitable even if it supports a controversial position or conflicts with mainstream opinion. In Better Public Media Trust, the Court of Appeal confirmed that disagreement with popular views does not disqualify a charity. However, if an organisation primarily promotes a social or political ideology without delivering tangible public benefits, it may struggle to demonstrate a genuine charitable purpose in its advocacy.

Practical Implications

Practically this means that charities may engage in a range of advocacy activities as long as they can be clearly connected to the organisations charitable purpose. Commonly this may include:

Making submissions on policy,
Raising awareness through media commentary,
Organising or participating in lawful protests,
Signing petitions,
Publishing reports.

However, it is not charitable to support or oppose a political party or candidate, promote a singular, exclusionary viewpoint or engage in illegal activities.

Ancillary Advocacy

Even if some advocacy activities are not charitable on their own, they may still be permissible if they are ancillary, meaning they are minor and connected to the organisation’s broader charitable purpose.

Charities play a vital role in democracy, speaking out on issues that matter to their communities. Advocacy, when conducted responsibly and in alignment with charitable purpose, is not only permitted but encouraged. Understanding the boundaries of charitable advocacy is essential for organisations seeking to make a meaningful impact while maintaining their charitable status.

All registered charities must now review their governance procedures every three years. We have heard it said that this is simply another burden for charities. We disagree and here’s why.

Why this requirement has been introduced

The policy goal seems to be to help charities succeed.

Some charities are large, well-established entities with robust governance procedures and highly-experienced people governing them. There is a reasonable likelihood that they review their governance procedures routinely.

However, a large proportion of charities are small and many are governed by people with mixed governance understanding and capability. We talk to many people governing charities who have not looked at their governance documents for years and some who are operating outside of what their rules allow. This places the people governing the charity at risk of doing something that is not legally permitted. It can also lead to charities not being well run and potentially failing.

We see this new obligation as the codification of good practice. Every charity (every legal entity) should regularly pause and reflect on how they operate. It will be time well invested.

What are ‘governance procedures’?

What does the term ‘governance procedures’ refer to? The Charities Act does not provide any firm answers, but we suggest governance procedures include, but are not limited to:

Key documents
- The key governing document – a charitable trust deed for charitable trusts, a constitution/rules for charitable incorporated societies, or the constitution for charitable companies.
- Secondary documents supporting the rules, such as bylaws, regulations, charters or policies.
Important practices
- How the charity deals with conflicts of interest.
- How does the charity deal with disputes and complaints.
- How the charity recruits and onboards new trustees or officers.
- The effectiveness of meetings and relationships.
- Financial practices.

How to satisfy the legal requirements

Below is a simple approach which can be tailored to your charity and circumstances. We suggest you focus on what you feel needs most work, most urgently. You do not have to do all of this at once and that is not the intention. You have a three-year window so we suggest scheduling the reviews across your calendar of meetings.

Step 1 – Look at your rules

When were your rules drafted or last updated?
Do you follow the rules? If not, why not? Do the rules need to be updated to reflect how you operate in practice?
Do the rules reflect recent legal changes such as the Charities Amendment Act 2023, the Trusts Act 2019 and the Incorporated Societies Act 2022? Remember, the legislation will usually trump the rules, so being aware of the legal changes is important for keeping those in governance safe.
Do you understand what every part of your rules mean? Ask for legal advice if something in the rules is unclear – you need to know what you are required to do and why.
Document your review briefly, setting out what you considered and what action you propose to take.

Step 2 – Update your rules (if NECESSARY)

Consider updating your rules if they do not reflect current practice and/or do not take account of recent law updates.
You may need legal advice to do this properly. Don’t forget to update Companies Office and Charities Services.
Document that you have amended your rules or why you haven’t if they are fit for purpose.

Step 3 – Review your supporting documents

Read over the documents. Do they correspond with your rules? Do they make sense? Is anything out of date?
If you don’t have a Board Charter, consider creating one. These make it easier to onboard new governors and make it clear how relationships are to work. There are excellent templates available free online that you can tailor to your circumstances.
If you do not have a Health and Safety Policy or a Privacy Policy, we recommend having these drafted to ensure you and any employees, contractors and volunteers understand their legal obligations.
If your charity involves vulnerable people and/or children, we also urge you to have a Child Protection / Vulnerable Persons Policy and Police Vetting Policy.
If you amend existing policies or draft new ones, ensure that these are well-communicated to all relevant people.

Step 4 – Review your practices

Does the charity have robust processes in place to manage conflicts of interest? If not, we recommend creating and following a policy and introducing an Interests Register.
How do you induct new trustees/officers onto the Board? What documents do you provide to support their understanding of what’s involved and key decisions from the past? A Board Induction Pack is ideal.
Do you review your meetings? This can help put a focus on constructive relationships and efficiency.
Are your financial processes robust? Are you confident that all payments are made according to your delegations? Is more than one trustee/officer required to approve payments?
Do your contractors and employees have proper contracts in place? Is there are clear understanding of who owns intellectual property?
Once you have considered the above, identify what could use some improvement and get to work. Then document what you reviewed, and what action you took as a result of the review.

Our key takeaways

Charities that invest in reviewing their governance practices will benefit by ensuring documents and practices are up-to-date, helping to keep people and the charity safe and effective.

Avoid a last minute scramble by scheduling the process throughout the three-year timeframe.

More information

We help charities to thrive. That’s why we provide a wide range of free resources to support them. Visit our Charities Information Hub for advice and guides.

We welcome questions too and offer free, no obligation 20 minute conversations – just get in touch.

Please note that this article is not a substitute for legal advice and you should contact your lawyer about your specific situation. Please feel free to contact us by completing the enquiry form or call us on 03 348 8480.

Is your organisation thinking of setting up a branch overseas? While local law will need to be considered, governance and structures which ensure there are connections into the future are also important factors in setting up branch organisations.

We have written this with international charities in mind, as for a business venture, there are different considerations at play.

This is to ensure that child organisations are linked to the founding body and that they have same vision and share a sense of unity and uniformity. Without such governance mechanisms, it becomes difficult for a founding body to guide branch organisations in other countries, or hold them accountable. This can be a problem if connection is lost and potentially the reputation of the parent organisation is impacted by the actions of an offshore affiliated group.

Governance Principles:

Some examples of oversight measures we can help to incorporate into the local organisation’s documents might include;

Appointment of Governance – before directors/trustees are appointed to the branch organisation, the founding body must give prior written consent of the appointment.
Removal of Governance – the founding body might be able to remove those in charge of the branch organisation by written notice.
Amendments to documents – The founding body could be consulted and approve of any changes to founding documents. This should including any changes to the clause that gives you this power, meaning that clause is entrenched.
Reference of your mission statement or overall purpose (including the specific purpose of branching out globally) and the founding body throughout governance documents.
Ensuring a consistent name is used at the branch level as well as any logos (see below).
Ensuring there are consistent purposes across each branch (while recognising there may be local law around what qualifies as charitable if you are a charitable organisation).
Considering how each branch relates to each other, and how you will incorporate this into the governance documents.
Ensuring that there is a consistent statement of faith included in all documents if your organisation is religious. This can help diminish the branch disseminating different interpretations or views that are not aligned to the founding body.

In implementing these principles, it is also important to get local tax and accounting advice to ensure there are not unintended consequences.

Intellectual Property:

Another important consideration is intellectual property (IP). This is often a very valuable asset for an entity and is also how an organisation is known. It is important to ensure that the founding body owns the IP that is used by the branch organisation.

We suggest trademarking the logo and name in jurisdictions where you will operate so that you own it.
We suggest an IP license with the branches setting out how they can use it and grounds for terminating use.
Consider ownership of domain names and that you retain ownership of those for each jurisdiction.
Consider social media accounts and who will run or own them.

This is also another mechanism that can be used to distance yourself from a branch organisation if they are no longer aligned with your views.

Policies:

Having consistent policies will also help as part of the overall governance structure and we suggest creating the following to start:

Privacy Policy & Data Protection Policy
Conflict Of Interest Policy
Child Protection Policy
Gifts Policy
Non-Disclosure Agreement

If you are interested in your options and would like to discuss further, please contact our team.

Please note that this article is not a substitute for legal advice and you should contact your lawyer about your specific situation. Please feel free to contact us by phone 03 348 8480.