The Incorporated Societies Act 2022, which came into force on 5 October 2023, modernised the legal framework for incorporated societies in New Zealand, replacing the outdated Incorporated Societies Act 1908. This new legislation introduced several key changes aimed at improving governance, accountability, and operational efficiency for societies. It also added a requirement, where all existing societies must re-register under the new Act by 5 April 2026 to maintain their incorporated status.
Key changes introduced by the Act
- Mandatory committee structure: Societies are now required to have a governing committee comprising at least three qualified officers responsible for managing the society’s operations and affairs.
- Defined officers’ duties: The Act codifies officers’ duties, including acting in good faith and in the society’s best interests, exercising powers for proper purposes, and ensuring compliance with the Act and the society’s constitution.
- Membership requirements: The minimum number of members has been reduced from 15 to 10, and societies must maintain at least 10 members at all times. Additionally, new members must provide written consent to join.
- Dispute resolution procedures: Societies are required to include procedures for resolving disputes in their constitutions, ensuring processes are consistent with natural justice principles.
- Financial reporting standards: The Act introduces new accounting standards, requiring societies to prepare financial statements in accordance with generally accepted accounting practice. Larger societies must have their financial statements audited.
- Re-registration requirement: All existing incorporated societies must re-register under the new Act by 5 April 2026. Failure to do so will result in the society ceasing to exist as an incorporated entity.
Steps for compliance
- Review and update constitutions: Societies should assess and amend their constitutions to ensure compliance with the new Act, incorporating required provisions such as dispute resolution procedures and updated membership criteria.
- Establish a qualified committee: Ensure the society has a governing committee with at least three qualified officers who meet the Act’s requirements.
- Maintain accurate membership records: Keep an up-to-date register of members, ensuring the society maintains the minimum membership threshold and obtains written consent from all members.
- Implement dispute resolution processes: Develop and document procedures for resolving disputes that align with natural justice principles.
- Prepare for financial reporting obligations: Familiarise the society with the new financial reporting standards and arrange for audits if required.
- Plan for re-registration: Begin the re-registration process well before the 5 April 2026 deadline to ensure continued legal status.
By proactively addressing these changes, incorporated societies can ensure a smooth transition to the new legal framework and maintain compliance with the updated requirements.
