Conceptualising the Chinese Charitable Trust

Abstract

In common law jurisdictions, there is a substantial literature on characterising charitable trusts as quasi-legal entities. In contrast, the debate on whether Chinese charitable trusts can be characterised as organisations has not yet been conclusively settled since their introduction in 2016. To date, no paper has presented a comprehensive analysis of the organisational characteristics of Chinese charitable trusts and why Chinese charitable trusts should be deemed organisations. This article aims to fill this analytical gap. In comparing the rules of English and American charitable trusts, this article first explores the internal governance rules and the asset partitioning rules that legislators have constructed for Chinese charitable trusts, as well as the problems associated with their observance. Next, this article discusses the implications of an organisational analysis for the improvement of the Chinese charitable trust system. It argues that the organisational character of the Chinese charitable trust lays the foundation for it to learn from analogous organisational forms in the course of its reform. Following this argument, this article discusses the reforms that can be made to the existing charitable trust rules.

Keywords: charitable trust, organisational law, internal governance, third party effect