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Important clauses you’ll need in your documents

Your not-for-profit body rules, constitution, trust deed or other founding documents will need to hold clauses (rules) before we can give you the exemption. Below are examples of the clauses you'll need to have in your documents:

Example: Preventing payments and unrestricted benefits to members

No member or person who is associated with a member of the organisation shall derive any income, benefit or advantage from the organisation where they can materially influence the payment of the income, benefit or advantage. The exceptions are where it is derived from:

  • professional services to the organisation carried out in the course of business that are charged at a rate that is not greater than current market rates, or
  • interest on money lent at a rate that is not greater than current market rates.

Example: Preventing any funds or assets being passed onto members for private use after wind-up

After the organisation has been wound up or dissolved, any property or cash remaining once all debts and liabilities are paid, shall not be distributed amongst or paid to the members of the organisation. It must be given or transferred to another organisation or body with similar objectives, or to some other charitable organisation or purpose within New Zealand.

Example: Preventing the two above clauses being altered (not needed if your rules do not allow for any rule alterations)

Inland Revenue must approve any addition to or alteration of the aims/objects, payments to the members clause or the winding-up clause. The provisions and effect of this clause should not be removed from this document and shall be included and implied into any document that replaces this document.

Last updated: 21 Jun 2021
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