{"id":223364,"date":"2023-05-23T15:09:49","date_gmt":"2023-05-23T02:09:49","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=223364"},"modified":"2023-05-23T18:23:07","modified_gmt":"2023-05-23T05:23:07","slug":"incorporated-societies-act-changes","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/business-structures\/incorporated-societies-act-changes\/","title":{"rendered":"What are the Changes to the Incorporated Societies Act in NZ?"},"content":{"rendered":"\n

Do you run an incorporated society in New Zealand? If you do, you might know that the Incorporated Societies Act 2022<\/em> has been passed. Consequently, this changes several practices to how incorporated societies are run and their duties and responsibilities. This article will explain what an incorporated society is and what the Incorporated Societies Act <\/em>changes in New Zealand.<\/p>\n\n\n\n

What is an Incorporated Society?<\/h2>\n\n\n\n

Historically, an incorporated society is a group of 15 people who can join to register themselves under the Incorporated Societies Act 1908<\/em>. Once an incorporated society is registered, it is designated as a distinct legal entity that can protect its members from debts and contractual obligations. However, members of an incorporated society do not have any financial interest in the assets owned by the incorporated society<\/a>. <\/p>\n\n\n\n

Main Differences Between the 1908 Act and the 2022 Act<\/h2>\n\n\n\n
Section<\/strong><\/td>1908 Act<\/strong><\/td>2022 Act<\/strong><\/td><\/tr>
Minimum number of members<\/td>15<\/td>10<\/td><\/tr>
Internal disputes<\/td>No requirement to have internal dispute resolution procedures.<\/td>A society must have adequate dispute resolution procedures, which must be specified in its constitution.<\/td><\/tr>
Committee requirement<\/td>Committee is not required.<\/td>Must have a committee of at least three members.<\/td><\/tr>
How many Independent members of committee must there be?<\/td>Not Applicable.<\/td>Unless regulations prescribe otherwise, the majority of the committee must be society members.<\/td><\/tr>
Concept of an officer<\/td>Not explicitly defined.<\/td>Includes all committee members, as well as others, for example, treasurer and CEO.<\/td><\/tr>
Officers\u2019 duties<\/td>Duties are not clearly articulated.<\/td>Six broadly expressed duties modelled on directors\u2019 duties in the Companies Act 1993<\/em> to:
– act in good faith and the best interests of the society;
– exercise powers for proper purposes only;
– comply with the Act and the constitution;
– exercise reasonable care and diligence;
– not create a substantial risk of serious loss to creditors; and
– not incur an obligation the officer does not reasonably believe the society can perform.<\/td><\/tr>
Annual General Meeting (AGM)<\/td>No guidance<\/td>Must be held within six months of the society\u2019s financial year end<\/td><\/tr>
Financial statements filed with Registrar<\/td>Must be filed annually<\/td>Must be filed within six months of the society\u2019s financial year end<\/td><\/tr>
Annual return<\/td>No requirement to file an annual return<\/td>Must be filed annually as outlined in section 109. <\/td><\/tr>
Manner of preparing financial statements<\/td>A society is not required to apply XRB accounting standards, unless it\u2019s also a registered charity <\/td>Only a ‘small society’  not registered as a charity is exempt from using XRB accounting standards. <\/td><\/tr>
Distribution of surplus assets after winding up<\/td>Surplus assets can be given to any party <\/td>Surplus assets must be given to a not-for-profit organisation.<\/td><\/tr>
Amalgamations<\/td>No legislative framework for amalgamations of 2 or more societies<\/td>Amalgamations can take place as outlined in the Companies Act 1993<\/em>, but follow a more simplified process.<\/td><\/tr>
Criminal offences<\/td>Generic offences set out in the Crimes Act 1961<\/td>Six offences that target egregious conduct, including:
– making false statements;
– fraudulent use or destruction of property;
– falsification of documents;
– defrauding of creditors;
– improper use of \u2018incorporated\u2019 or its Te Reo version \u2018manat\u014dpu\u2019; and
– breaching of a banning order.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n
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