Incorporated Societies – What’s changing?

AI and Misleading Advertising — What are the consequences?

Mainzeal's directors lose Supreme Court appeal

Can an emoji be legally binding?

Commercial Leases in New Zealand

The way incorporated societies are run in New Zealand, as well as their duties and responsibilities, is changing under the new Incorporated Societies Act 2022 (Act).

Overview and Re-registration Requirement

This Act was passed into law on 5 April 2022 and has ushered in a new era for nonprofit organisations, drawing upon modernised governance and management best practices to enhance transparency, accountability, and overall efficiency in the sector.

There are currently 24,000 incorporated societies registered across New Zealand. All these societies will need to consider whether they wish to continue their operations, and if so, prepare to re-register under the Act. The timeframe for re-registration runs from October 2023 to April 2026. Any societies that do not re-register before April 2026 may be struck off from the register.

Societies planning to re-register under the Act will need to complete a review of the society's rules to ensure it aligns with the Act’s requirements. Once this is completed, the society can submit an application to the Register of Incorporated Societies to re-register under the Act.

Why have these changes been made?

The Incorporated Societies Act 1908 has been in operation for over 110 years and described as “uncomfortably old” with little amendments made over the decades. The purpose of the new legislation is to -

improve the self-governance of societies;
strengthen the responsibilities of financial compliance;
introduce statutory duties for the officers of societies; and
provide members with a constructive dispute resolution process.

Key changes under the new Incorporated Societies Act

The changes introduced by the Act are summarised below and inform each society’s review of their rules/constitution prior to re-registration. We encourage all societies and their officers to review the changes introduced by the Act to gain an understanding of what it means for them and how the society operates.


Rules/Constitution	The society’s ‘rules’ document is referred to under the new Act as the ‘Constitution’ and must contain the following: the name and purpose of the society; the process for becoming a member and how membership ends; procedures for amending the society’s constitution, noting the different requirements between ordinary amendments or minor or technical ones. information about committee members, the number of members on a committee, the functions and powers of the committee and the procedures for committee meetings (such as voting and quorum requirements); information about each ‘officer’ position in the society, including appointment process, terms of office and grounds for removal; processes for managing and controlling the society’s finances; a provision nominating a not-for-profit entity to which the society’s assets may be distributed on wind-up/liquidation; arrangements to keep the society’s register of members updated; appointment and replacement of the society’s contact person; a dispute resolution process; and a process for members to make complaints.
Committee Requirements	Societies are required to have a governing body or ‘committee’ with at least 3 people. The committee is made up of the officers of the society. Societies must have at least one dedicated contact person whose details are made available to the Registrar. The contact person does not have to be an officer of the society.
Duties of Officers	Officer duties in the Act are modelled on directors’ duties under the Companies Act 1993. Officer duties include: Acting in good faith and in the best interests of the society Exercising powers for proper purposes Comply with the Act and the constitution Exercise reasonable care and diligence Not create a substantial risk of serious loss to creditors Not incur an obligation the officer doesn’t reasonably believe the society can perform.
Membership	The minimum number of members has been reduced from 15 members to 10 members
Dispute Resolution	Societies are required to adopt a dispute resolution process. There is a dispute resolution process set out in the Act which Societies can adopt, if appropriate.
Annual General Meeting	AGM must be held within 6 months of the society’s balance date.
Financial Reporting	Financial statements must be filed with the Registrar within 6 months of the society’s balance date. Financial statements are required to use XRB accounting standards, with an exception only for ‘small societies’.
Asset Distribution	Surplus assets after winding up must be given to nominated not-for-profit organisations.
Amalgamation Regime	The process by which two or more societies may merge, amalgamating their members and assets (and even their names) now follows a simplified framework, set out in the Act.
Criminal Offences	Egregious management and administrative misconduct now recognised as a criminal offence
Te reo Māori	All documentation and records, including financials can be written in English or te reo Māori.

The detail provided above will have different implications for each incorporated society, and therefore we recommend that you seek further legal advice if you have any queries or would like to discuss these matters further.

Please contact our Incorporated Societies specialist Beatrice Chamberlain or come along to our 'Roadmap to Re-registering' Seminar Event happening on the 30 November, 2023.