Let’s Talk … New Legislation Updates for Incorporated Societies

Are you an Incorporated Society or thinking about becoming an Incorporated Society?

As of 5 October 2023, new legislation under the Incorporated Societies Act 2022 came into force. Existing Incorporated Societies (those already incorporated under the 1908 Act) will need to re-register under the 2022 Act if they want to remain as an Incorporated Society. New societies wanting to register will automatically register under the 2022 Act.

Being an Incorporated Society has its advantages - the society is a separate legal entity and as a result has limited liability. Here’s some helpful information to guide you through these changes, to ensure your society is compliant. 

If you decide to re-register under the 2022 Act, your society will need to:

• Provide a constitution that’s compliant with the 2022 Act;

• Include dispute resolution procedures in its constitution;

• Have a committee that’s responsible for managing the operation and affairs of the society;

• Have at least 10 members;

• Provide at least one person’s contact details. 

Once your society has re-registered, it will need to:

• File an annual return and its financial statements with the Incorporated Societies within six months of its balance date (end of financial year);

• Keep up-to-date information on the register, i.e. contact details, details of its officers, rules or constitution;

• Hold its AGM within six months of balance date; 

• Prepare financial statements to new standards. Small societies must follow minimum standards, and larger societies will need to use accounting standards set by the External Reporting Board (XRB), and some will need to have their financials audited;

• Ensure all new officers consent in writing to be an officer and certify that they’re not disqualified;

• Maintain a register of members and records confirming the written consent of each member to become a member.

Existing societies have three years to re-register – between the period of October 2023 and 5 April 2026. If existing societies choose not to re-register, they will cease to exist and will no longer be incorporated but may continue as unincorporated societies. For these societies remaining under the old legislation, the following will apply:

• The society will not be a separate legal entity to its members;

• There is potential personal liability for members;

• There are no automatic rights to the assets – that is decided by the Registrar;

• It loses its protection of its name;

• It will be liable to Income Tax.

If you would like to chat about these changes, please feel free to contact us at MCI & Associates, or for additional in-depth information, visit the Incorporated Societies website: is-register.companiesoffice.govt.nz