An interactive guide to understanding the key differences between a Community Company Limited and a Non-Profit Charitable Trust — based on the Solomon Islands Business Registry (Company Haus) framework.
Answer two quick questions and we'll point you in the right direction.
1. Does your group intend to earn income or run a commercial activity?
2. How important is formal legal protection for your assets and funds?
Companies Act 2009 · For-profit model, community-locked
Charitable Trusts Act · Grants & donations, pure charitable purpose
Introduced under the Companies Act 2009, a community company is intended to be run as a business. It can earn a profit — however, that profit is kept within the company and must be used to benefit the defined community as a whole. Shareholders cannot personally pocket the earnings.
Registered under the Charitable Trusts Act, this structure exists strictly for charitable purposes — religion, sports, helping the elderly, or land conservation, for example. The government explicitly states a Charitable Trust is not appropriate if the community wants to make a profit.
Operates as a formal corporate entity with shareholders and directors. Shareholders represent the community. Directors have clear legal obligations under the Companies Act and must manage the business responsibly. The structure offers limited liability — providing greater certainty and protection when dealing with third parties like banks or suppliers.
Managed by trustees rather than directors. According to the Solomon Islands Business Registry, a significant downside is that the law can be "unclear about the duties of trustees", and it can sometimes be unclear who the "members" of the trust are or who benefits. It lacks the strict, modernised management rules that govern companies.
Has strict statutory rules to protect community assets:
No dividends or loans — profits are locked in for the community and cannot be paid to shareholders or directors.
Asset lock — major assets cannot be sold unless the community is notified, 75% of shareholders agree, and the sale is at fair market value.
Can easily receive grants and donations as long as they are strictly for the trust's charitable purpose. However, it does not have the same rigid statutory "asset lock" rules for business assets. Community members may have a harder time making legal claims against trustees if funds or assets are mismanaged.
Registration is free through Company Haus. Requires strict annual compliance. Every financial year, directors are legally required to file a report outlining:
— How the company benefited the community
— Consultations undertaken with the community
— Any assets disposed of
— Director remuneration
Cheap and relatively fast to set up. The Business Registry notes that professional legal advice is highly recommended to draft the trust deed correctly. Works best if the absolute priority is the charitable purpose rather than trading or compliance activity. Ongoing reporting obligations are less formalised than for a company.
| Factor | Community Company | Charitable Trust |
|---|---|---|
| Governing law | Companies Act 2009 | Charitable Trusts Act |
| Can earn profit? | ✓ Yes — locked for community | ✗ No — not suitable for profit |
| Leadership | Directors + Shareholders | Trustees |
| Limited liability | ✓ Yes | ✗ Not guaranteed |
| Asset lock | ✓ Statutory lock (75% vote required) | ✗ No formal lock |
| Dividends to members | ✗ Prohibited | ✗ Not applicable |
| Receive grants/donations | Possible but not the primary use | ✓ Ideal — core funding model |
| Registration cost | ✓ Free (Company Haus) | Low cost, but legal fees advised |
| Annual reporting | Strict — required by law | Less formalised |
| Clarity of duties | Clear under Companies Act | Can be legally unclear |
| Best suited for | Community stores, agriculture, eco-tourism | Religious groups, charities, conservation |
You want to operate commercially and keep profits for the community
Your focus is purely charitable — funded by grants and donations
The Solomon Islands Business Registry views the Community Company as a modern alternative to Charitable Trusts and Co-operatives for groups that want to operate commercially while ensuring profits are legally protected for community development. The Charitable Trust is better suited for purely philanthropic, social, religious, or conservation groups relying on grants and donations rather than business income.