Sports Groups - 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.

We have helped many overseas charities set up in New Zealand. Why is it an attractive place to set up? This is a very generous country with a population that is open to supporting others. Also, the regulatory environment makes it easy to start a charity. In this article we want to outline some of the key things to know from an overseas perspective if you are looking to set up here.

Before we dive in please note that with this focus we have not gone into the detail of the process to set up a charity itself which we already covered in detail in this article so read that one in combination with this one. Instead we are thinking about the key things to know if you are an overseas charity which is looking to set up in New Zealand.

What we find is that the following are the crucial points to consider:

Purpose – focus on New Zealand? Is the new charity being set up to do the work you do in another country on the ground here? Or are you looking to fundraise in New Zealand to send the funds back offshore? The answer to this is really important because a New Zealand charity can be set up easily BUT will only qualify for tax donee status (favourable tax position and ability to issue receipts to donors so they can claim back 1/3 of what they give) if 75% of the funds are used in New Zealand.
Purpose – focus offshore? If you plan to send the funds back offshore this is important to be clear about at the start. If the funds raised here are to go offshore then you may still qualify if you can come under Schedule 32 status (funds are to be used offshore for humanitarian purposes) – we go into detail about this here as we have helped close to 20 obtain this status.
Trustees: It will help with the application to show a connection to New Zealand so rather than having all offshore trustees it is best to have a majority who are here in New Zealand. It is possible to have only offshore trustees but if you do then this is likely to convert the trust into a foreign trust with some accounting implications (speak to your accountant about this).
Accounting and tax: picking up on that last point it is important to structure things well so that you are in the best position from a tax and accounting position so as well as talking to your lawyer make sure you get input from an accounting professional.
Connection to overseas entity: It will be important to think through how closely aligned the new entity will be. For example, should all new trustees be approved in writing by the overseas charity? Will there be an MOU in place about how things will run? Will there be a license agreement about the use of trademarks? All these things need to be thought through. It may be that instead of a close connection that it is intended that the new entity is to be independent – that’s fine too.
Understand the local context: Find out more about how things operate here for charities – you can do that by downloading our free book for Charities in New Zealand here. We also host a call every two months for the impact sector where many people share about what they are seeing – examples of these are here. It may help to get a better understanding of the society here too – for example the relations with Māori and the unique value that brings to the way we operate here. Many charities choose to include a clause about honouring the principles of the Treaty of Waitangi or translating headings in their Trust Deed. The point is it helps to get to know the local landscape and we can help with that process. One of our Partners hosts a podcast called seeds theseeds.nz which has hundreds of interviews with local people doing good so there are many stories to learn from.Our team is experienced with overseas entities coming here and setting up charities and social enterprises. We would be happy to assist you in your journey. For more information, please feel free to contact Steven Moe stevenmoe@parryfield.com or Michael Belay michaelbelay@parryfield.comWe also have free resources for start-ups, boards and companies including a “Start-ups Legal Toolkit” which covers the key issues we see people face when starting out.

We often help founders set up their charitable trust. They often have the same questions as the previous person we helped – so we have typed out some responses to typical questions here. If this helps you then feel free to share it with others as well and if you have a more detailed question not covered here then let us know and we can add the answer in.

Can a Charity Founder and the Board Chair also be the NGO Manager/CEO?

In theory this is possible but it is not best practise. Management (CEO role) is different to Governance (Chair role) and so there is a danger of blurring of the two roles. Also, if the founder is the CEO/Manager then they lose out on having a Chair who is able to advocate for them and provide good strategy. If they are the Chair then they would lose out on having an engaged and activated CEO. So it is best to split the roles up. The IOD have produced a lot of good material on topics of governance in Charities here.

If the Founder steps down as Chair but remains Manager, how can they be protected from being made redundant or forced out from the Charity

Often in the Trust Deed the Founder – in that document called the Settlor or Donor – have certain rights which are different to other Trustees. If they are a Trustee then they can usually not be removed as easily as other Trustees. However if the Founder is no longer a Trustee and is employed by the Trust then ultimately it is up to the Trustees to decide if they are doing a good job or if a change is needed. This may be a reason why the Founder would want to stay involved in the governance – but also underlines the importance of making the right choice of Trustees, but ultimately they have a duty to act in a way that helps the success of the Trust.

How can a Founder protect their connection to the Charity – for example does there need to be a clause that without them the Charity doesn’t continue? Or have a founding honorary role?

They could be appointed as Patron or a similar title for ongoing connection. It seems unlikely that future Trustees would force such a person out but they need to act for the best interests of the Trust not the individual who founded it. It is possible there could be good reasons for the Charity to move forward without a Founder eg criminal convictions or fraud by them. Hopefully the Founder will have entrusted the vision and articulated it so well that the Charity is not entirely linked with the Founder so that it can go on beyond the person and last much longer. Founders who hold on tightly to the entity can often find that this ultimately damages the overall potential – the Charity is more than a person and needs to be given room to grow and adapt in ways that are at present not known.

Would there need to be a process for recruitment for a Manager and the Chair so whoever would be a candidate couldn’t simply automatically become Manager?

This may come back to the distinction between management and governance mentioned earlier – Chair of the Board of Trustees should ideally be separate to the Manager/CEO role. Each position should be recruited for separately. In a small charity this may not be possible as the Founder/Chair/Manager can be blurred since someone – usually the one with the original vision – needs to actually drive it along at the start.

How to prevent conflicts of interest arising within the Charity and what are the risks?

Good practice is to have some independent Trustees involved in the Charity who will not be employed by the Trust or involved in other ways that the Founder might be. Also, a conflict of interest register should be kept where any conflicts are noted. Each meeting any conflicts should be raised as well. The risks of not disclosing conflicts is that there could be negative publicity later on if a person acts in a way that benefits them personally but is to the detriment of the Charity.

If there is also a related company to the Charity then should it be owned by the Charity?

It depends. Mainly the question to answer is about funding sources and use of money that comes in. If the Company is owned by the charity then there can be no private gain to an individual. Instead a Company can be owned separate to the Charity and the Charity can use the Company to perform some aspects of fulfilling the purposes. If this is the case then there needs to be independence on the Charitable Trust so decisions made that benefit the Company are made by people who will not privately benefit as eg Shareholders of the company. We described the options and considerations in more detail in a short podcast here.

We hope these responses are helpful and provide guidance on the interrelationship between a Founder, a Charity and other stakeholders. If you have any questions then let us know

This article is not a substitute for legal advice and you should consult your lawyer about your specific situation. Please feel free to contact Steven Moe – stevenmoe@parryfield.com, or Michael Belay – michaelbelay@parryfield.com at Parry Field Lawyers.

Section 5(2A) of the Charities Act 2005 states that “the promotion of amateur sport may be a charitable purpose if it is the means by which a charitable purpose referred to in subsection (1) is pursued”. So, what sports actually meet these criteria for a charitable purpose?

The purpose of section 5(2A) is to ensure that the promotion of a sport can be a charitable purpose. While promoting a sport is not in itself a charitable purpose, the purpose of a charity could include the promotion of a particular sport for the purposes of promoting health or for the advancement of education, as is established in the section.

Recently, after six years of Swimming NZ being a registered charity, the Charities Registration Board decided to de-register it. The reasoning behind this was that it no longer had charitable purposes due to the competitive and elite nature of the high performance programme. This in itself does not promote a sport but instead promotes sporting success which does not benefit the public. They decided that while there was some promotion to health, the focus on promoting success in the sport outweighed this.

The impact of this decision by the Charities Registration Board is that sporting organisations set up as charities will need to prove that they are existing to promote health as opposed to promoting success in the sport, and ultimately be benefiting the public.

An article which discusses this in more detail was posted by the New Zealand Law Society and can be found here.

So, to answer the question above, any sport can meet the criteria for a charitable purpose as long as it relates to the promotion of health, the advancement of education or anything else that proves to be beneficial to the community, and it will need to be able to prove that it does continue to promote these.

The Charities Services website provides a helpful overview on this topic which can be found and here.

We offer legal advice on all aspects of charitable trusts and are happy to answer any questions that you might have. Contact Steven Moe at stevenmoe@parryfield.com or 03-348-8480 for more information.

What are your options when a charity “runs out of steam” but you don’t want to give up on it altogether? What if you want some time to have a break from the charity and its compliance obligations, but intend to come back to it in a few years? We were recently asked the question of whether it is possible for a charity to “pause” for a period of time, and here is what we said:

Can you “pause” a charity?

Generally, a charity is deregistered (removed from the Charities Register) where it ceases all activity. This means that in order for a trust to remain “alive”, it must continue to be active. Pausing a charity essentially means that all activity for the charity will cease for a period of time and it is therefore no longer active. If a charity has been de-registered and wishes to get back on the Charities Register, it will need to go through the application process again.

There is, however, an exception to this – it is possible for a charity to continue to file annual returns for the years that it is “paused” which essentially holds the charity accountable to the fact that it has paused. So long as the charity is not making any returns, it would not need to pay anything on filing those annual returns.

Conclusion

In conclusion, it is possible that you could pause a charity and come back to it in a couple of years, provided that you continue to file an annual return each year for the years where the charity is paused. This option could be advisable where you do not want your charity to be deregistered and to have to go through the application process again at a later date.

Every situation is unique so please discuss your situation with a professional advisor who can provide tailored solutions to you. We offer advice on all aspects of charitable trusts and are happy to answer any questions that you might have. Contact Steven Moe at stevenmoe@parryfield.com or 03-348-8480 for more information.

Introduction

So you have a great idea that just might make a difference in the world, but are wondering about how to formalise a legal structure that would help you do that? A charitable trust is one of the most commonly used options in New Zealand. This article describes the steps to set up a charitable trust and key points to consider.

Advantages of a charitable trust

A charitable trust can provide a number of advantages. For example:

Reputation: Funders and donors tend to gain comfort if the entity is a charitable trust (rather than a private business or individual). Where a company sets up a charitable trust and invites staff to participate, they will be motivated by the charitable purposes.
Tax status: There can be tax advantages in registering as a charitable trust with Charities Services (see below).
Longevity: A trust is not dependent on one individual and can go on long after the founder ceases to be involved, in “perpetuity” in fact.

Great examples of charitable trusts in New Zealand include World Vision, The New Zealand Breast Cancer Foundation, and Ronald McDonald House.

Key points before setting up

To set up a charitable trust you will need a founding document for the Trust – called a Trust Deed. This is the legal document which sets out the key elements of the Trust. The questions you should answer before you see your lawyer are as follows:

What are your purposes? A charitable trust must be charitable. That may sound basic but it isn’t necessarily as easy as having a good idea – for example if you want to develop a new type of transport that is safer than a car then it sounds great but by itself that purpose won’t be “charitable”. You need to fall within one of the following categories to count as a charity:
Alleviate poverty: This does not just apply to the destitute but could be for those that fall below the ordinary standard of living. It could be achieved through financial means but also through practical means such as providing food and shelter;
Promote education: Whether something is deemed to be charitable under this category will depend on its usefulness and its educational value;
Promote religion: This is about the promotion of a wide range of spiritual teachings. Charitable purposes under this heading could range from the provision and maintenance of ministers/religious leaders to the provision of buildings for worship. However, it does not include just the promotion of certain ethics.
Other charitable purposes beneficial to the community: This in a way is a “catch-all” provision. It can include such purposes as the promotion of health and recreational facilities. However, a trust will not be deemed charitable under this category if it is not for some public benefit.

Whether your purposes will fit the definitions is something that we can discuss with you.

Practical considerations, cost and timing involved

Before you take the next steps it is worth knowing a few practical points, which include:

Writing the Trust Deed – particularly the charitable purposes can take a few weeks to get all trustees on board and an agreement. Important issues such as the statement of purposes, who hold the power to appoint and remove trustees, are best decided before the trust deed is signed.
Time frames involved to get decision – a few days for Companies Office, a few weeks/months for Charities Services.
Registering with Companies Office – this is a free application which must be signed by all trustees. In addition one trustee must sign a statutory declaration in support of the application and attach a certified copy of the trust deed.
Time frames for incorporation – 1-2 days once application documentation signed.
Cost for application – this is a free online application on the Charities Services website.
Application requirements – the application form is reasonably detailed. It must be accompanied by a statutory declaration from one of the trustee applicants. Charities Services, when considering your application, will want to see good evidence of the Trust’s existing or intended charitable activities so that it can satisfy itself the actual activities are genuinely charitable.
Time frames for registration – this can take up to three months from the time Charities Services receive application.
Time frame for tax exempt status – Charities Services should notify IRD directly once your charitable registration is approved, but it can take a few weeks for your trust to show up on the IRD’s list of donee organisations.
The availability of trustees to sign documents – this can depend on where your trustees are.

Summary

Although setting up a charitable trust can take time, it is often a most worthwhile structure to have in place. We have helped many charities over the years and would be happy to discuss your situation with you.

Our team is experienced with charities, social enterprises and trusts that are common in this area of law. We would be happy to assist you in your journey. For more information, please feel free to contact Steven Moe at stevenmoe@parryfield.com or 021 761 292. We have free resources for start-ups, boards and companies including “Start-ups Legal Toolkit” which covers the key issues we see people face when starting out (it’s a free PDF guide in the resources section of this site).

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