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Incorporated societies: What you need to know about the Incorporated Societies Act 2022

After 114 years, the rules governing New Zealand’s incorporated societies have been changed for the first time.  If you are one of the 24,000 not-for-profit entities currently registered as an incorporated society in New Zealand under the 1908 Incorporated Societies Act, you will need to be aware of the key changes in the Incorporated Societies Act 2022 (“Act”).

Existing societies have until 1 December 2025 to re-register under the 2022 Act otherwise they run the risk of ceasing to exist as an incorporated society. 

What are the key changes?

Memberships

Previously, incorporated societies were required to have 15 members. However under the new Act, an incorporated society must always have a minimum of 10 members.  All people will be required to consent to being members.  Societies will also be required to keep an up-to-date register of members including their names, contact details, and the date each person became a member. 

Constitution

Every society will be required to have a constitution which complies with the requirements of the Act.  There are also a number of key provisions that every constitution must contain. For example, a constitution will need to contain the purposes of the society and procedures for resolving disputes, including how a complaint may be made.

Committee

Societies will now be required to have a committee comprising of three or more qualified officers. The committee will act as the ”governing body of the society” and will be responsible for managing the operations and affairs of the society.  A majority of the officers must either be members of the society or representatives of corporate bodies that are members of the society. 

Officers

Officers are required to be natural persons, must not be disqualified from acting, and must consent to acting.  Officers will have additional codified duties which are very similar to the duties of company directors. Officers must: 

  • Act in good faith and in the best interests of the incorporated society;
  • Exercise their powers for a proper purpose;
  • Comply with the Act and the constitution;
  • Act with due care and diligence that a reasonable person with the same responsibilities would do in the same situation;
  • Not agree to, cause or allow for, the activities of the incorporated society to be carried on in a manner that is likely to create a substantial risk of serious loss to creditors; and
  • Not agree to the society incurring obligations that it cannot perform.

Financial Statements and Annual Returns

Incorporated societies will be required to file an annual return in the manner prescribed by the regulations.  Incorporated societies will also be required to prepare financial statements in accordance with the size of their society.  Small societies (total assets under $50,000) must meet Public Business Entity (PBE) standards, whereas large societies (total revenue over $33m) will need to have their financial statements audited by a qualified auditor.  Every society must file financial statements with the registrar within six months after the balance date of the society. 

What do you need to do?

  • All existing societies will need to re-register with the Registrar of Incorporated Societies by 1 December 2025.
  • Failing to meet the requirements under the Act by this date will result in your incorporated society being struck off the register and become an unincorporated society.
  • Failing to re-register will run the risk of the members, officers and committee members becoming personally liable (individually and jointly) for the society’s debts, and any surplus assets will be distributed in accordance with the 2022 Act.

Now is a good time to review your society’s existing constitution and make the necessary modifications to ensure that it will comply with the requirements of the 2022 Act.  

Unsure where to start? The team at Fortune Manning are able to provide advice and assistance on the re-registration process, and ensure your constitution complies with the 2022 Act.  

If you would like more information please contact- Tony Fortune, Jack Soh and Katherine McCarthy.

Fortune Manning Lawyers

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