Does Charity Begin at Incorporation? A Comparative Analysis of the Statutory Mechanisms for Charitable Entity Creation
44 Pages Posted: 15 Jul 2019
Date Written: September 1, 2017
Charities offer a means for individuals to work collectively to enhance social well-being. In recent years, the sector has undergone widespread growth, playing a critical role in social service delivery and economic development. This has placed greater pressure on the sector to meet the demands of the modern commercial landscape. This paper considers the implications for incorporation of charities, concluding that incorporation can facilitate coordination between individuals, minimise risk and strengthen trust and confidence in the sector. The three main statutory mechanisms for incorporation under the Companies Act 1993, the Incorporated Societies Act 1908 and the Charitable Trusts Act 1957 are compared against the key features of the modern commercial corporation. The paper concludes that the current legislative regime is outdated and reform is needed to address the significant legal uncertainties and provide minimum governance structure requirements to promote trust and confidence in the sector and ensure charities can reach their full potential.
Keywords: charity, charitable trusts, company law, incorporated societies, not-for-profit
JEL Classification: K00
Suggested Citation: Suggested Citation