After more than 100 years a new draft Incorporated Societies Act has been released for public comments and submissions.

The draft was released on 10 November 2015 and public submissions close on 30 June 2016. The legislation is expected to be introduced to Parliament in 2017 and perhaps enacted in 2018.

There will be a long transition period for Incorporated Societies to change to the new Act by 2020 (at least two years after enactment of the legislation) and it will be four years after enactment for the Act to be fully in effect.

The good news is that existing Societies will be deemed to be registered under the new Act and will not have to re-register, but will be required to meet some new requirements in their constitutions (and file those with the Registrar) and to ensure their officers comply with the requirements to be qualified.

The Registrar may declare that the standard constitutional clauses apply if a Society has not lodged a complying constitution.  The Registrar can also liquidate non-compliant Societies and is to refuse registration if the Society’s purposes or constitution do not comply with the Act.

Financial Gain

As currently, a member of a Society may not gain financially from membership. The Act creates an offence for an officer of a Society in relation to financial gain of a member with the officer’s authority, permission or consent. The Act removes the offence for a Society itself in relation to financial gain. It is only the officers who are liable.

Dispute Resolution

The current Act provides no process for disputes resolution. The new Rules provide for dispute resolution processes between members and also between members and the Society
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Winding Up

All Societies must nominate in their constitution a Not For Profit entity or class of entities for distribution of assets on the liquidation of the Society. This can be amended later if required but cannot be left until the Society is about to wind up.

Standard Provisions

Standard provisions for a Society’s constitution will be provided once they have been approved by the Minister on the recommendation of the Registrar. Societies can adopt some or all of these as parts of their constitution or adopt their own provisions (which must still comply with the Act). There is no model constitution provided due to the vast variety of Societies that exist.

Officers of Societies

Officers must be at least 16 years of age and one of the officers has to be nominated as the contact officer who has no extra duties or subject to any offence provisions but is a contact person for the Ministry.

Number of Members

Under the current Act the Society only needs to have the minimum number of members to register and can then drop below that. However, under the proposed Act a Society must continue to have at least 10 members .  If the Society drops below 10 members it can continue to operate while seeking new members and has six months to get back to at least 10 members.

AGM

AGMs can be held using modern technology and must be held within set time frames. The Act provides what business must be conducted at the AGM.

AGMs and SGMs require a quorum of 10% of members attending in person or by audio visual means.

Motions can be raised by the committee or members. If from a member they must provide them to the committee at least 28 days before the AGM/SGM. The committee can decide whether or not the society will vote on any motion.  However, if 10% of the members sign the motion, then it must be put to the vote.

Notices

The Secretary must, at least 7 days before a meeting, give notice to all members of the business of the meeting, notices of motion, supporting information for motions and the committee’s recommendations about any motions.

For AGMs the secretary must provide the annual report, financial statements and the list of nominees and information about them. There appears to be an inconsistency in the drafting of the proposed provisions because candidates must be proposed and seconded 5 days before an AGM [section 5.7] but the Secretary must tell all members 7 days before the AGM of the people nominated. [section 9.15]

Other points of interest are that the Chair will have a casting vote and any amendments to the constitution will only require a majority vote.

This is only a short summary of the main points set out in the proposed legislation and discussion document. We will give updates as the consultation and legislative processes progress.