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Checklist for setting up a Charitable Trust

Charitable trusts are usually the most appropriate structure when a small number of people wish to incorporate for a charitable purpose but do not have a wider ‘membership’ (in which case an incorporated society may be better), or a particularly ‘commercial’ focus (in which case a company structure or ‘social enterprise’ might be considered).

Every trust will have a different focus that will need to be considered when drafting the trust deed. However, there are some core things that always need to be decided upon when setting up a charitable trust.

We have put together a short checklist to help you get started:

  • What is the trust’s core purpose?
  • Does the trust have any purposes or activities other than its core purpose?
  • What powers will the trustees have? Will any restrictions apply to those powers?
  • How many trustees will the trust have?
  • Does the trust need an establishment period within which the trustees’ powers are restricted?
  • How regularly will the trustees meet?
  • What rules will apply to trustee meetings?
  • Strict time frames and rules; or
  • Some flexibility for trustees to set meeting procedures.
  • How will trustees be removed and appointed?
  • Will the trust require a treasurer and a secretary?
  • What rules will apply to the Chair of the trust board?
  • How is the Chair appointed, and how often?
  • Should the Chair have a casting vote?
  • Should proxy voting be allowed?
  • Should the trust’s accounts be audited?  Note - if the trust is registered as a charity, the accounts must be reviewed and/or audited if the total operating expenditure for the previous two accounting years is above certain thresholds (over $500,000 must be audited or reviewed, over $1 million must be audited)
  • Will general meetings be held, and if so what rules will apply?  
  • What procedures will apply upon winding up the trust?  Note – if the trust is a charity the trust deed will need to provide for the assets to go to another charitable organisation or purpose upon winding up.  



Claire Tyler