The Incorporated Societies Act 2022 (Act) came into force on 6 April 2022.
The reregistration period opens on 5 October 2023 and runs for 2.5 years to April 2026, during which time all existing incorporated societies must reregister or they will cease to exist as incorporated societies.
Our answers to frequently asked questions about the new Act can be found here.
The Act stems from a review of the Incorporated Societies Act 1908 by the Law Commission in 2013. It retains the underlying principles of the current law but codifies it and fills gaps where there is no case law, such as in relation to conflicts of interest. Our earlier summary of the ten key changes introduced by the Incorporated Societies Bill can be found here and a summary of the recommendations made by the Select Committee can be found here.
What do societies need to do, and by when?
All societies will need to do the following:
- Review their constitutions and update them to ensure that they comply with the new requirements. We expect that most societies will need to amend their constitutions and some societies may take the opportunity to review their constitutions to ensure they are still fit for purpose at the same time.
- Appoint or elect at least one (and no more than three) contact person(s) being the person(s) that the Registrar can contact when needed. The contact person does not need to be an officer of the society but must be at least 18 years old and ordinarily resident in New Zealand.
- Ensure that they have a governing body of three or more officers who each meet the qualification requirements set out in section 47 of the Act.
- Reregister under the new Act which will involve providing certain information (to be prescribed by the regulations) and a copy of the society’s constitution that is compliant with the new Act.
Societies will need to reregister under the new Act by April 2026 (the Transition Date). If a society fails to file an application for reregistration by the Transition Date, it will cease to exist on that date.
What are the ongoing obligations of societies once they have transitioned to the new regime?
The key ongoing obligations of societies under the new Act include:
- Societies that are not registered charities will need to file annual returns (registered charities are already required to file an annual return with Charities Services under the Charities Act 2005). The information required in the annual return has now 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.
- Societies will need to prepare and file 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.
- Societies will need to maintain a register of members including the name, last known contact information and the date they became a member, for all current members and those who have resigned from the society within the last seven years. A register of all current members is already required to be held and maintained by societies under the 1908 Act.
What do societies registered as boards under the Charitable Trusts Act 1957 need to do?
The Act amends the Charitable Trusts Act 1957 as follows:
- societies will no longer be able to register as a board under the Charitable Trusts Act; and
- existing societies incorporated as boards under the Charitable Trusts Act may choose to:
(a) continue to be incorporated as a board under the Charitable Trusts Act as if that Act had not been amended by the new Incorporated Societies Act; or
(b) apply to be reregistered as a society under the new Incorporated Societies Act (which will require it to review and amend its existing constitution to ensure it is compliant with the new Incorporated Societies Act).
We can provide further guidance for societies to assist with the transition to the new Act.
Please do not hesitate to reach out to one of our specialist not-for-profit lawyers in the meantime if you have any queries.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.