Re-registration of incorporated societies

30 Nov 23

The new Incorporated Societies Act 2022 (new Act) is now fully in force and incorporated societies will need to re-register under the new Act before 5 April 2026 in order to remain an incorporated society.

The new Act was passed into law on 5 April 2022 but only came fully into force on 5 October 2023. It replaces the Incorporated Societies Act 1908 (old Act), and requires all existing incorporated societies registered under the old Act to become re-registered under the new Act before 5 April 2026 in order to remain incorporated societies.  Once they re-register, the rules in the new Act will apply to them but they will continue to be bound by the old Act until re-registration has been completed.

Any new incorporated societies now need to apply for incorporation under the new Act rather than the old Act and will be immediately bound by the new Act.

Re-registration (or not)

An incorporated society may choose to apply for re- registration at any time from now until 5 April 2026. Some societies may not wish to re-register until later or at all. All societies should start considering the new requirements now to prepare for re-registration or consider if re-registration is appropriate for them.

Most societies will need to update their constitution/rules before they can re-register and should develop a plan for this early on so the necessary approvals can be obtained and the process can be completed within the re-registration period.

Some societies may find that an incorporated society structure is no longer appropriate for their needs under the new Act and may wish to consider restructuring (e.g. changing their structure from an incorporated society to a charitable trust) or winding up altogether.  We can help you consider what structure would be best for your incorporated society and provide advice on the pros and cons of remaining an incorporated society.  Whether or not a restructure is appropriate will depend on an incorporated society’s specific goals, the way it wishes to operate and tax implications.  For those that want more flexibility in governance or higher levels of control and stability, a charitable trust structure may be more appropriate.  We can assist with that transition.

If an existing incorporated society does not re-register by 5 April 2026, then it will cease to exist. It is important to plan ahead to ensure re-registration (or restructuring) is able to be completed before 5 April 2026.

Charitable Trusts Act 1957

A small number of incorporated societies may currently be registered under the Charitable Trusts Act 1957 (CTA).  These existing incorporated societies can choose to re-register as an incorporated society under the new Act or to remain registered under the CTA. Now that the new Act is fully in force, there will be no new incorporated societies registered under the CTA. All new incorporated societies must be registered under the new Act.  The new Act does not affect the registration of existing societies that remain registered under the CTA however.

Key Changes

Existing societies will need to meet re-registration requirements under the new Act before they can apply to re-register. These include having:

  • a compliant constitution/rules;
  • a proper governing committee responsible for managing the operation and affairs of the society;
  • a clear process for becoming and ceasing to be a member of the society, including a requirement for members to consent to become a member;
  • at least one contact person for the society;
  • a compliant dispute resolution procedure; and
  • the required minimum number of members.

Constitution

A society’s “rules” are referred to in the new Act as its “constitution”. The new Act sets out details that must be included in a society’s constitution, including:

  • the name and purpose of the society;
  • the process for becoming a member and how membership ends;
  • the process for becoming a member and how membership ends;
  • 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 committee and other ‘officer’ position in the society, including appointment process, terms of office and grounds for removal;
  • arrangements and requirements for general meetings, including timing of annual general meetings, information to be presented to members and meeting procedures;
  • processes for managing and controlling the society’s finances;
  • nomination of 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;
  • procedures for amending the society’s constitution;
  • appointment and replacement of the society’s contact person; and
  • procedures for resolving disputes and complaints.

Societies re-registering under the new Act will need to review their existing constitutions to assess whether they comply with the new Act or if their constitution needs to be updated before re-registering. Most, if not all, constitutions will likely require some form of updating to comply with the new Act and the changes will need to be approved in accordance with the existing rules or at the society’s annual general meeting in accordance with the new Act.

Committee and officers

Societies will be required to have a governing committee with at least 3 members. The majority of the committee members must also be a member of the society (or a representative of a corporate member). All committee members are officers of the society and must consent to be an officer and meet the qualification requirements set out in the new Act. Non-committee members (e.g. the treasurer, secretary and chief executive) may also be officers of the society.

Mandatory dispute resolution procedures

Under the new Act, a society must have a formal dispute resolution procedure that follows the rules of natural justice and refer to that procedure in its constitution.  Schedule 2 of the new Act sets out a procedure that can be adopted by a society (or used to inform its own procedures) but that procedure will not apply by default if not expressly adopted in the society’s constitution.

Members and Minimum Membership

Societies will need a minimum of 10 current members at all times under the new Act. This has reduced from the previous minimum of 15 members but is now a continuous requirement. For the purposes of this minimum membership requirement:

  • a body corporate member (e.g. a company or another incorporated society) will continue to count as three members; and
  • a person that has not consented to be a member will not be counted as a member.

Additional changes

The new Act has made several other changes that societies should take note of, including provision for:

  • new financial reporting standards for financial statements (including audit requirement for larger societies);
  • filing annual returns and annual statements;
  • record-keeping and making information available to members;
  • disclosing and dealing with conflicts of interests;
  • amalgamations of incorporated societies;
  • officers’ duties, based on similar provisions for directors under the Companies Act 1993; and
  • enforcement provisions and offences.

Want to know more?

If you have any questions about the new Act or need assistance drafting a compliant constitution, considering your options or applying for re-registration, please contact our specialist Sophan Pearson or Sarah Simmers.

PDF version here.