If you are part of an existing incorporated society or planning to set up a new one, you will need to be aware of the Incorporated Societies Act 2022 (2022 Act), which came into force on 5 October 2023. Compared with the Incorporated Societies Act 1908 (1908 Act), this new law brings significant changes to how societies operate, and it is crucial to understand what this means for your organization.

Key Changes and Deadlines

  • Transition Period: From 5 October 2023 to 5 April 2026, both the 1908 Act and the 2022 Act are and will be in force. However, societies registered under the 1908 Act must re-register under the 2022 Act by 5 April 2026.
  • Re-registration: If your society was incorporated before 5 October 2023, you must re-register by the deadline. Failure to do so may result in your society being removed from the register.
  • Personal Liability Risk: If your society continues to operate after the transition period without re-registering, members and committee may be held personally liable for the society’s debts and other obligations.

Key Requirements under the 2022 Act

The 2022 Act introduces many new governance and operational requirements. Here are some of the key changes:

  1. Minimum Membership: The minimum number of members has been reduced from 15 to 10. If membership falls below 10, the society may face liquidation or removal from the register.
  2. Member Consent: Members must now consent in writing to join the society. Ensure your membership application process reflects this requirement.
  3. Committee Requirements: Every society must have a committee of at least 3 qualified officers. Committee members must consent in writing and must not be disqualified (e.g., undischarged bankrupts or individuals convicted of serious offences).
  4. No Financial Gain for Members: Societies must not operate for the financial gain of their members. Non-compliance may result in fines or liquidation.
  5. Officer Duties: The 2022 Act codifies six key duties for officers, including acting in good faith, exercising powers for proper purposes, and avoiding activities that could seriously harm creditors. Breaching these duties may result in personal liability.
  6. Dispute Resolution: Societies must have clear dispute resolution procedures in their constitution, consistent with the rules of natural justice.
  7. Financial Records: Societies must maintain accounting records for at least 7 years and file annual financial statements in line with the 2022 Act’s requirements.

How We Can Help

At Franklin Law, we understand that navigating these changes can be complex. We are here to help your society transition smoothly and remain compliant with the 2022 Act. Our services include:

  • Legal Consultation: Guidance on understanding and complying with the 2022 Act.
  • Document Preparation: Assistance with updating your constitution. Depending the particular requirements of your society.
  • Re-registration Support: Helping you complete the re-registration process with the New Zealand Companies Office. 

Act Now to Protect Your Society

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The information contained in this article is necessarily of a generalised nature and is correct as at February 2025. Specific advice should be sought in relation to any particular situation.