A charitable company is an ordinary limited liability company that has been registered as a charity on the Department of Internal Affairs Charities Register under the Charities Act 2005, and is eligible to receive a tax exemption.
In order to be registered as a charitable company on the Charities Register, the company has to have exclusively charitable purposes. These charitable purposes have to be set out in the company’s constitution.
How to become a charitable company
First, apply to the Companies Office for incorporation as a limited liability company. The steps are as follows:
- Check that the proposed name of the company is not currently reserved or registered on the Companies Office website, and the trade mark register on the Intellectual Property Office of New Zealand website.
- Reserve the proposed company name by filling out a name reservation form on the Companies Office website. The Registrar of Companies will then issue a notice of reservation, and the name will be reserved for 20 working days after the date the notice of reservation is issued.
- Prepare an application for company registration. The application for registration has to contain
- the full name of the company
- the company’s registered officer and address for service
- the full name and residential address of each director and shareholder, and
- the number of shares to be issued to each shareholder.
- Provide consent forms and certificates of eligibility for each director.
- Provide consent forms for each shareholder.
- Submit the company’s constitution, which must set out the company’s charitable purposes, alongside the application for registration.
- File all the documents (notice reserving company name, application for registration, consents and certificates, and the company’s constitution) with the Companies Office. It costs $10 to reserve a name and $105 to apply to register the company.
Once the company is incorporated with the Companies Office, you can apply to the Department of Internal Affairs Charities Services for registration as a charitable company. The process is set out at the Charities’ website, here (or go to: www.charities.govt.nz and click on “Applying for registration?”).
Charitable companies may be suitable for groups that:
- want the liability of shareholders to be limited
- want more flexibility in decision-making (as decisions do not need to be made by all members as with an incorporated society), and
- have some trading purpose