The Incorporated Societies Act 2022: How the New Act will impact Incorporated Societies?

Having been in force for over 100 years, the Incorporated Societies Act 1908 (“Old Act”) was due for an update.

On 5 October 2023, this update saw the new Incorporated Societies Act 2022 (“New Act”) come into force.

The New Act contains several provisions that will impact the approximately 24,000 Incorporated Societies in New Zealand. This article will cover some of the key changes under the New Act.

Re-registration

All existing Incorporated Societies will need to re-register as an Incorporated Society. The deadline for re-registering is 5 April 2026. Until re-registration is complete, existing Incorporated Societies are required to comply with the Old Act. Any new Incorporated Societies registered after 5 October 2023 will be automatically registered under the New Act.

If an Incorporated Society opts not to re-register, it can appoint a liquidator or apply to be dissolved, depending on the rules of the Incorporated Society.

Failure to re-register under the New Act can have serious consequences. If an Incorporated Society fails to re-register by 5 April 2026 and does not appoint a liquidator, the New Act will determine the outcome of the Incorporated Society. This may include removing the ability to make decisions, including in respect of the assets owned by the Incorporated Society. The Incorporated Society may not retain its separate legal identity and individual members of the Incorporated Society may become liable for its debts or obligations.

Key changes in the New Act

The New Act has brought in significant changes, which impact on how an Incorporated Society operates. This includes:

The requirement for every Incorporated Society to have and register a constitution. The New Act specifies what must be contained in the constitution, but an Incorporated Society can choose to include additional rules.
Incorporated Societies are required to have a committee responsible for managing its operation. The committee must have at least three people who are “officers” of the Incorporated Society. People who are only members of the Incorporated Society can also be on the committee, but the majority of members of the committee must be officers.
Officers must provide consent to act as an officer. The officers must follow specific duties including:
- acting in good faith and in the best interests of the Incorporated Society;
- exercising reasonable care and diligence; and
- complying with the New Act and the Incorporated Society’s constitution.
An Incorporated Society must have at least ten members.
An Incorporated Society’s name can end with “Incorporated”, “Inc”, or “Manatopu” and documents can be written in Te Reo Māori or English.
Each Incorporated Society must have a register with the member’s consents, contact details and the date they became a member.

Obligations once registered under the New Act

Once registered under the New Act, an Incorporated Society must:

Hold an Annual General Meeting within six months of its balance date.
File its financial statements with the Registrar within six months of the balance date.
File an annual return each year. This involves reviewing the society’s key information and updating it if required.
Obtain consent from all new members to joining, through an application form or something similar.
Keep an interests register to record when there is a conflict of interest or potential conflict of interest between the Incorporated Society and an officer.

The changes contained in the New Act represent a major overhaul of how Incorporated Societies are run.

If you require any advice or assistance with re-registering your Incorporated Society or understanding the other new requirements, please do not hesitate to contact us at AWS Legal.