The Incorporated Societies Bill was introduced into Parliament on 17 March this year and has now passed its first reading.

The Bill seeks to modernise the law around Incorporated Societies, as the old legislation is now over 110 years old.

What is an Incorporated Society?

An incorporated society is a group or organisation registered and incorporated under the Incorporated Societies Act 1908 which is made up of members who democratically govern the organisation. The society operates for purposes other than financial gain for its members.  There are around 23,000 incorporated societies in NZ.

An incorporated society is a legal entity so has the right to run its affairs in the same way as an individual can. 

Timeframes

Public submissions in relation to the Bill close on 28 May 2021, so if you want to make a submission you still have time to do so. These can be made via Parliament’s website.

There will be a long transitional period for incorporated societies to change to the new Act by 1 December 2025 (at least two and a half years after the discontinuation of new applications for incorporation under the old Act).  It should therefore take four years after enactment for the Act to be fully in effect.

Existing societies will need to re-register under the new regime. If a society hasn’t met the requirements by the above date, then the society will cease to exist and a restoration application will be required. 

There are two key things that existing societies will need to do to comply with the new regime, in order to re-register:

1.    They will be required to meet some new requirements in their constitutions to comply with the Act; and

2.    They will have to ensure their officers comply with the requirements to be an officer (e.g. over 16 years of age, not convicted of dishonesty offences in the last 7 years, not disqualified from being a director or an officer of a charity, not lacking mental capacity).

Constitutions

A Constitution is a governing document of a Society, previously called “rules”.

Under the new Act, Societies will be required to have a Constitution and there are specific things that need to be included in a Constitution.  These include:

  •        The purposes of the society
  •        How the society will keep the register of members up to date
  •        Rules regarding how someone becomes a member and how a member ceases to be a member.
  •        The composition, powers and roles of the committee.
  •        A dispute resolution process that complies with the Act
  •        Information about General meetings
  •        Nomination of a not-for-profit entity or class of entities to which the assets of the society are to go if the society is             wound up
  •        It must not confer on any member the right or interest in any of the Society’s assets;
  •        How the constitution can be amended.

You may also add reference to expressing tikanga or the ability to make by-laws in your constitution.

The Registrar will refuse registration if the society’s purposes or constitution do not comply with the Act.

Any part of a constitution that does not comply with the Act has no effect, so you can’t try to “contract out” of the Act.

Conclusion

The requirement to re-register will mean that all societies will need to be aware of the requirements, should the Bill become law.  We expect that incorporated societies will therefore be watching the progress of the Bill with interest, as will we.