15th August 7.30pm
As many of you may know we are a not-for-profit Association, run by volunteers.
To ensure that we are fulfilling all of our legal obligations as an Incorporated Society, we have recently applied for and been assigned an IRD Number so that we are complying with our Income Tax obligations. Being a not-for-profit we are able to apply for a tax exemption which means that we will not have to pay tax, however we have to comply with certain conditions to gain this status. We have been working with IRD behind the scenes to make this possible, the last step in this process is making sure that our rules have specific clauses in them relating to being a not-for-profit.
IRD has recommended a couple of additions to our rules to provide clarity around our obligations so that we can gain compliance with their requirements prior to being given our approved status as a not-for-profit.
Below are the changes that IRD have requested, A copy of the proposed changes to our rules is available on our Website – in the members section under resources.
The following paragraph needs to be added to clause 17: “As a not-for-profit organisation, the officers and members may not receive any distributions of profit or income from it. This does not prevent officers or members:
- receiving reimbursement of actual and reasonable expenses incurred, or
- entering into any transactions with the organisation for goods or services supplied to or from them, which are at arms length, relative to what would occur between unrelated parties.
Provided no officer or member is allowed to influence any such decision made by the organisation in respect of payments or transactions between it and them, their direct family or any associated entity.”
Clause 25 allows for the rules to be altered. There must be a clause stating that the objects, personal benefit clause and winding up clause cannot be altered. Please include the following paragraph: “No addition to, deletion from or alteration of the organisation’s rules shall be made which would allow personal pecuniary profits to any individuals. The provisions and effect of this clause shall not be removed from this document and shall be included and implied into any document replacing this document.”
Please add to the end of clause 27 the following wording: “On winding up or dissolution of the organisation any surplus funds or assets shall not be paid or distributed to any members or individuals but shall be:
- applied to a purpose in line with the organisations objects, or
- given or transferred to another not-for-profit organisation.”
You should receive an email regarding the Special General Meeting, you can cast your vote from the email
Voting will close @ 5.00pm 15th August 2023.
Currently our rules state that any rule changes must be made at an AGM or Special General Meeting where we have achieved quorum which is 15% of our total membership.
We will hold a Special General Meeting on 15th August 2023 at 7.30pm for the purpose of reporting vote totals and to ratifying the decision.
Link to the meeting is – https://meet.google.com/usw-rznj-zjq
If the rule changes are approved, we can then lodge the rule changes with the Registrar of Incorporated Societies and update IRD so that we can complete the Requirements to enable our approval for not-for-profit status and Tax exemption.
The Executive Committee supports the changes to our Rules for the following reasons.
- to gain approved not-for-profit status from IRD
- to gain tax exemption status from IRD
- to gain not-for-profit status for services & benefits only open to not-for-profits, which would save us thousands of dollars on operating costs.
I’m looking forward to seeing you all at the Special General Meeting on the 15th of August, where we will have the chance to update our rules so that we can gain our not-for-profit status and enable us to make the most of the opportunities this status will give us access to.
Chair of NZSMA