Setting Up and Managing a Charity: Legal and Practical Issues & Upcoming Issues

Charities have been growing rapidly in Hong Kong and it is estimated that now over 7,500 charities are operating in Hong Kong. The Hong Kong Law Reform Commission has published a report on charities following a six-year review of charity law in Hong Kong. It aimed at protecting the interests of charitable donors as well as providing a framework in which charities can operate under greater accountability and transparency when they conduct their activities. This course will examine the establishment, administration as well as management and corporate governance issues concerning charities.

Detailed Information

Highlights of the course include:

  • Introduction
    • What is a charity and difference between the UN, INGOs, Local NGOs, etc? Whom do you wish to fund?
    • What is effective grant making?
    • Which sectors are you interested in supporting?
    • Factors to examine – e.g. Disaster Relief, Risk Management, Transparency, Accountability, etc?
    • Pre-funding and post funding evaluation
    • Importance of financial conditions and MoUs
    • Governance
    • Internal procedures
    • Budgetary factors
  • Establishment Issues
    • Usual structure of a charity and set-up procedures
    • What is the underlying legal status between non-profit organizations, charitable trust/foundations, NGOs etc? Unincorporated associations vs. company vs. trust?
    • Requirements under the Societies Ordinance & Companies Ordinance
    • Drafting the M&As / constitutional documents, key clauses and main clauses to note e.g. investment powers, etc.
    • Defining the charitable purposes / mission – can a charity recognized in Hong Kong benefit the needy outside Hong Kong?
    • Removing “limited” – application for exception and procedure
    • Application under s.88 of the Inland Revenue Ordinance – procedure
  • Ongoing administration issues
    • Filing and annual requirements
    • Treatment of donations – what types of donations can be tax deductable for donors? Issuing receipts
      • Duties and liabilities of members / office bearers (executive officers vs. non-executive board members / trustees / advisors)
      • Who are the stakeholders? Donors v. beneficiaries
      • Differences on liability of the office bearers depending on legal status of charitable entity
      • Does remuneration level impact on liability
      • Ownership / occupation of premises by charities etc
      • Use of Directors’ and Officers’ liability insurance
  • Management and governance issues
    • Proper delineation of duty between executive officers vs. chairman / advisory board / trustees
    • Matters which need board / committee approval vs. management approval; tips for setting budget etc.
    • Ensuring that proceeds / donations received are properly channelled
    • Proper investment of assets – investment criteria / guidelines?
  • Litigation by or against a charity
    • Common claims
    • Special considerations e.g. costs; right to sue or to be sued, can donors sue the charity for using funds improperly?
  • The lawyer and charities: volunteer, adviser, honorary solicitor, board member, etc.
  • Other recent developments
    • Requirement to Disclose Financial Details
    • Social Enterprises
    • Report on Charity Law Reform
    • How amendments to Companies Ordinance impacts charities formed as companies limited by guarantee

Registration Conditions

To view our registration conditions click here.