As the deadline for re-registering under the Incorporated Societies Act 2022 approaches, societies across New Zealand are reminded that only one year remains to complete this essential process. The new Act, which replaces the Incorporated Societies Act 1908, introduces updated requirements aimed at enhancing governance, accountability, and transparency for incorporated societies.
With less than half of the remaining grace period afforded to societies to re-register, it is crucial for societies to begin the re-registration process if they have not already done so.
In our article, “New Incorporated Societies Act 2022: What Societies Need to Know”, we outlined the fundamental aspects of the new legislation and key timings. It is key for societies to understand that failing to re-register under the Incorporated Societies Act 2022 means the society will cease to exist as of 5 April 2026.
Our second article, “Key Changes under the Incorporated Societies Act 2022“, delves into the specifics of the changes, such as the need for societies to update their constitutions, officer duties, maintain a minimum number of members, establish clear governance structures, implement a dispute resolution process, and adhere to new financial reporting standards. These changes are designed to support societies to operate effectively and responsibly, and to provide a solid foundation for future activities.
In our most recent article “Indemnities or Insurance for Officers, Members, or Employees under the Incorporated Societies Act 2022“, we discuss the indemnity and insurance provisions for officers, members, and employees of societies under the Incorporated Societies Act 2022. It highlights the need for societies to ensure their constitutions allow for indemnities and insurance, as non-compliance renders such provisions void.
Alternatively, in “Incorporated Societies: Is it Time to Think About Moving to a Charitable Trust?“, we explored the potential benefits of transitioning to a charitable trust structure. For some societies, this may be a strategic move to consider, especially in light of the new requirements and the focus on accountability and transparency. Charitable trusts can offer advantages such as tax benefits and a more streamlined governance structure, which may be appealing under the new regulatory environment.
Consider and transition to the new legislation before it’s too late
Failure to re-register by 5 April 2026 will result in the cessation of the society’s existence, stripping away all rights and protections afforded to an incorporated society. This includes:
- Loss of Decision-Making Authority: The society will lose its right to make decisions regarding its assets, with the Registrar potentially directing their distribution instead.
- Personal Liability for Members: The society will no longer be considered a separate legal entity, exposing members to personal liability for debts or obligations, such as leases, owed by the society. Additionally, the society will be unable to enter into new contracts in its name.
- Loss of Name Protection: The society will lose any protection over its name, allowing another group to incorporate using the same name.
If you have any questions about the transition to the new legislation, our Gaze Burt team would be more than happy to assist you.
