The idea of establishing an incorporated society can be daunting - we have prepared a series of frequently asked questions to help you understand what the new Act means for your society.
What is the Incorporated Societies Act 2022?
The Incorporated Societies Act 2022 is new legislation which replaces the previous Incorporated Societies Act 1908 and is intended to modernise the law applying to incorporated societies. While the new Act retains the underlying principles of the existing law, it also fills gaps where there is no case law, for example in relation to conflicts of interest. It came into effect on 5 October 2023, which is when the re-registration period commenced.
What does my society need to do, and by when?
All existing incorporated societies need to:
Societies have until 5 April 2026 to complete re-registration.
We have prepared a timeline for re-registration which covers the likely steps in more detail.
Does the old Incorporated Societies Act 1908 not apply anymore?
The 1908 continues to apply to existing incorporated societies until they have re-registered (or until 5 April 2026). New societies being set up must incorporate under the new Act.
What happens if my society doesn’t re-register?
An existing incorporated society which fails to re-register by 5 April 2026 will cease to exist as an incorporated society. The society’s committee/board will become a group of individuals who are personally liable for the society’s commitments before it ceased to exist (e.g. debts, liabilities, staff).
Ceasing to exist will be especially problematic for incorporated societies with contractual obligations like loans, assets, property, and employees.
Societies should do everything they can to ensure they have re-registered within the timeframe.
What should a compliant constitution include?
The new Act sets out mandatory provisions that must be in every constitution:
Many existing constitutions made under the 1908 Act will not include some of these additional requirements and so will need to be updated.
Can we use a template constitution?
You may find templates available, which may be suitable for some organisations. However because each society is so different, for many it will be worthwhile preparing an updated constitution that is tailored to suit the organisation’s specific needs. Following a template runs the risk of implementing unsuitable or unnecessary rules, which could lead to extra costs and even potential disputes down the line.
When does a new constitution take effect?
A society’s new constitution will not take effect until it has been accepted and the society re-registered by the Registrar of Incorporated Societies. You must apply for re-registration within 25 working days of being approved by members.
During the delay between the constitution being approved at a general meeting and re-registered, the society must continue to operate under its old rules.
Will my society have ongoing obligations after re-registering?
Annual returns: Following re-registration, incorporated societies that are not registered charities will need to file annual returns to the Registrar of Incorporated Societies. The information required in the annual return has been set by regulation and includes the New Zealand Business Number and registration number of the society, the physical address of the registered office, and the name and contact details of at least one contact person.
Incorporated societies which are also registered charities are already required to file an annual return with Charities Services under the Charities Act 2005.
Financial statements: Incorporated societies will need to prepare financial statements that comply with certain financial reporting standards depending on the society’s size. An audit is required if the society is not a charitable entity, and its total operating payments are $3 million or more in each of the two preceding accounting periods.
Register of members: Incorporated societies will need to maintain a register of members including names, contact information, and the date on which they became a member for all current members, and the name of all those who have ceased to be members of the society within the last seven years and the date on which their membership ceased.
Can an incorporated society change its name as part of the re-registration process?
Yes, and it might be a good time to do so while updating your society’s constitution and re-registering.
Incorporated societies must have a name that ends with the word “Incorporated”, “Inc”, or “Manatōpu”.
Is there a re-registration fee?
There is no re-registration fee. There are fees for new societies incorporating under the 2022 Act, and for applying to be restored to the Register after de-registration. These can be found on the Companies Office website.
Does my society still need a common seal?
A common seal is no longer required under the new Act. Your society can choose to still have a common seal, in which case the constitution must have a common seal clause setting how and when the common seal is to be used.
How many members does my society need to have?
Under the new Act an incorporated society must have at least 10 members. This is less than the 15 members required under the 1908 Act.
What is a contact person?
Under the new Act all incorporated societies must have at least one, and up to three, contact person(s) who will be the Registrar’s point of contact with the society. The contact person must be 18 years of age or older, and ordinarily resident in New Zealand.
What does the new Act say about members having to consent to becoming members?
The new Act requires all new members from the date of re-registration to consent to being members of the incorporated society. This requirement does not apply to existing members as at the date of re-registration, so it is not necessary to obtain consent from everyone who is already a member when your society re-registers.
The new Act does not specify whether consent must be express or can be implied, except in the case of members which are body corporates in which case the consent must be in writing and provided by an authorised representative.
For some societies, this consent requirement may pose a challenge, for example if membership is currently automatic by virtue of something else (e.g. paying a commodity levy) or if some members are minors and it may not be possible to obtain consent from them. As part of reviewing and updating the constitution, some societies may need to modify their processes to ensure that member consent can be obtained.
What does the register of members need to contain?
The register of members must contain:
Is being an incorporated society the right structure for my organisation?
It may be timely for your society to consider whether remaining an incorporated society is the right thing to do. We can provide specialist advice and guidance to your society to understand the other structural options available and whether they might be a better fit. We can also help you navigate the change process if your society decides to move to an alternative legal structure.
Does my society have a board or a committee – and what’s the difference?
The new Act defines a “committee”, meaning the three or more officers who are qualified to be elected or appointed in accordance with the Act and who are responsible for managing the society. Every incorporated society must have a committee.
The term “board” is often used interchangeably to refer to a society’s governing body, i.e. its committee.
“Board” can also refer to an existing society that has incorporated as a board under the Charitable Trusts Act 1957. We have prepared more information for societies incorporated as boards, to help them understand the implications of the new Act for them.
The team at MoranLaw can provide advice and guidance to help your society navigate the requirements of the new Act.