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Clubs and Societies

Compliance | Legal Obligations

Compliance | Legal Obligations

There are quite a few things you need to consider when leading your club as a committee member....

Liability

The majority of our Clubs and Societies are unincorporated legally. While there are benefits to this a limitation is that they don't "legally exist" as an entity. This means they can't own property, borrow money, and in many cases receive external funding. It also means members of the group committee, and possibly all members are personally responsible (liable) for any obligations the group takes on, and for any judgement made against the group by the courts. Executive members need to seriously consider this, before putting their club name down for something!

 

Tax

Irrelevant of whether or not your club is incorporated your club income is subject to tax, through IRD. What you pay will depend on your club's legal status (i.e. whether you are non-incorporated, incorporated or a charity), how much money you've turned over and the type of income you receive. Many clubs can qualify for a $1000 tax exemption because of their non-for-profit (NFP) status. NFP here refers to the fact that no individual member/s of the club benefit financially from its operations. This means the first $1000 of "profit" is exempt from tax. However, you need to have the paperwork to support you are truly an NFP organisation. 

Annual Clubs and Societies tax returns (i.e. the forms) are due July 7th each year, with any payments due by the following February.

There's plenty of information online, including the Club and Societies Tax Return Guide. However, the information can be overwhelming and there's a lot of jargon thrown in. Our advice, if you are struggling is to approach your CDO or Dunedin Community Accounting, who offer free accounting advice for NFPs.

 

GST

GST is separate from tax. With a threshold of $60,000 turnover (your income, not profit) it's not a concern to most of our groups. However, it's something you should be conscious of and where you pushing upward of $50,000 income consults with the CDO or Dunedin Community Accounting. GST again comes with a higher degree of compliance and paperwork, though can be beneficial with writing off particular costs.

 

Privacy Act 2020

What is privacy? Privacy relates to personal information, which is any information that can identify us. Personal information refers to any information that makes an individual reasonably identifiable. It can also include opinions about the individual, whether the information is true or not.

Your core obligations are as follows:

  1. Only collect personal information for a designated  (and lawful) purpose. If you've said you're going to use their information for x, y and z. Make sure it's for x,y and z not a and b. They've not consented for a and b.
  2. Eliminate unnecessary information collection, or unfair or unreasonably intrusive information collection
  3. Disclose what is being collected, why it's being collected, how it's being stored, who has access to it, if the collection is compulsory (or optional) and how they can go about viewing, editing, or deleting their private information where relevant
  4. Collect information directly from the person at hand
  5. Seek permission to collect information
  6. Have reasonable safeguards in place to prevent loss, misuse or disclosure of personal information
  7. Safely discard information when it is no longer necessary
  8. Only disclose personal information in limited (legally approved) circumstances
 
Health and Safety Work Act 2015 (HSWA)

The HSWA identifies clubs, societies, and other non-for-profit volunteer organisations as PCBU’s if you have one or more employees. If you have no employees, you will not be considered a PCBU. For the majority of our clubs, you are then not recognized as a PCBU and therefore have no legal obligations under the HSWA.

You do however have obligations to OUSA in being an affiliated club, Otago University if hosting events on campus and lastly but most importantly moral obligations to your club members. OUSA expect the committee members of our affiliated clubs and societies to:

  • Identify, assess and control hazards
  • Involve and inform your members of the above processes
  • Monitor identified hazards
  • Ensure members have the appropriate safety clothing and equipment
  • Ensure club equipment is fit for purpose

Though the HSWA may not have a legal application, it does provide a framework for best practice systems and processes and has a lot of helpful information and resources that your club can take advantage of.

 

Your affiliation to OUSA may be jeopardized if there are reasonable grounds for concern over your club’s health and safety management systems.

 
Noise - Resource Management Act 1991

Just a quicky here about being aware of your surroundings and other people, showing respect for the environment your within. The city and other areas of NZ have pre-determined thresholds for noise which is considered "appropriate". Noise that falls outside of this is deemed excessive and may incur some intervention or potential penalities from noise control officers. Please do your best to "read the room" and alter your noise (and behaviour) as required.

 

Food Act 2014

The Food Act promotes food safety and is regulated by councils around NZ. You are expected to comply with this act where you are selling food. It does not cover the provision of food where there is no cost - although again the act provides a framework that is best practice regardless of that fact. When planning to sell food we encourage clubs to discuss their ideas with the Dunedin City Council well in advance. This will establish whether your activities fall under the act and or any other factors your need to consider.

 

Sale and Supply of Alcohol Act 2012
  • Alcohol is an inherent influencer of health and social risks
  • Within the tertiary community, it’s clear that there’s an overrepresentation of incidents (of varying nature) with the coupling of alcohol use
  • The object of this act is that the sale, supply and consumption of alcohol is undertaken safely and responsibly, and the harm caused by the excessive or inappropriate consumption of alcohol should be minimized
  • But this just applies to bars and stuff right? Nope
  • It applies to all scenarios where the is some means of exchange of money for alcohol. This applies even where it’s an indirect exchange. For example, a membership fee of x, will get you x goons over the year, or an event ticket of x, will get you three tokens that can be exchanged for x drinks.
  • Where you have that exchange, you’ll either need to abolish it or seek out a Special Liquor License through the DCC
  • An SLL is difficult to obtain. You need to show a high level of oversight and compliance requiring a heavy amount of paperwork, time to process and an application fee
  • Our advise then is to eliminate scenarios where alcohol is directly or indirectly sold, in favour of using licensed premises
  • Individuals can of course purchase their own alcohol which raises the question of individual verse club responsibility
  • The short answer is that both your individual members and the club have obligations
  • Behaviours surrounding alcohol consumption become problematic when club activities and alcohol use are intertwined and it’s widely accepted as part of the club culture – with culture not having to be “documented” but rather collective understanding or expectations.
  • You can help re-build your club culture by using the host responsibility framework of providing leadership and oversight, general hazard management, training, documenting and sharing information with your members, preventing intoxication, denying service to minors (or those intoxicated), responsibly promoting your activities (i.e. modelling good behaviours, building expectations around what is acceptable, contributing to positive club culture and intervening when you see behaviours that don't align with the club or OUSA's expectations)

 

Incorporated Societies Act 1908 and Registered Charities

If your club holds a legal status such as an incorporated society or registered charity you will have additional legal obligations to meet. There are pros and cons for establishing yourself as a legal entity and these can be discussed with our CDO on a case by case basis. 

 

Un-incorporated Clubs and Societies

Un-incorporated means you’re not an incorporated society, charitable trust, business or other legal entity (recognized by NZ law).  Most of our clubs start off and remain unincorporated. Generally, this works just fine rarely impacting the day to day operations.

 

Rules and Processes

As a matter of good practice, an unincorporated group should record its rules and processes for managing the group's affairs and making decisions. These rules could be based on the group's past practice and should be agreed upon by all your members. Although there is no legal requirement* for writing down your rules, it will help your group operate smoothly and will also be useful if any disputes arise, especially if there are assets or money involved.

*Note OUSA has its own unique requirements for affiliation.

 

Key Advantages

  • Fewer legal and administrative requirements
  • More flexible structure, with fewer rules or restrictions

Key Limitations

  • Members can be held personally liable
  • No legal standing to enter into contracts, own property or borrow money
Incorporated Societies

An incorporated society is set up under the Incorporated Societies Act 1908. Once incorporated, it means a society can legally run its affairs as though it were an individual person. The NZ Companies Office is responsible for administering the Societies and Trust Register that registers Incorporated Societies.

 

Rules and Processes

Incorporated Societies must have constitutions that include specific clauses under the Incorporated Societies Act 1908.

 

Key Advantages

  • Members are not personally liable for debts and other obligations
  • You may enter into contracts, own property or borrow money (noting the OUSA Affiliation Policy has its own requirements around this)
  • You may be eligible for external funding

Key Limitations

  • Additional legal and administrative requirements
  • Your structure is less flexible, with more rules or restrictions

If your club is interested in being recognized as an incorporated society head to https://community.net.nz/resources/community-resource-kit/process-for-setting-up-an-incorporated-society/ for more information.

 

Charitable Trust

If you would like to become recognized as a charitable trust, you’ll need to approach the Companies Office. Charitable Trusts must act exclusively or principally for charitable purposes which are the advancement of education or religion, the relief of poverty, sickness or disability or any other purpose that benefits the community.

 

Rules and Processes

Charitable trusts require a constitution however there is more flexibility in the individual clauses compared to incorporated societies.

 

Key Advantages

  • Members are not personally liable for debts and other obligations
  • You may enter into contracts, own property or borrow money (noting the OUSA Affiliation Policy has its own specifications surrounding this)

  • You may be eligible for external funding

Key Limitations

  • Additional legal and administrative requirements
  • Your structure is less flexible, with more rules or restrictions

If you are interested in becoming recognized as a charitable trust head to https://community.net.nz/resources/community-resource-kit/process-for-setting-up-a-registered-charitable-trust/ for more information.