The recent introduction of the new Incorporated Societies Act will have an impact on sector organisations. This resource is designed to assist sector boards on navigating these changes.
The new Incorporated Societies Act was passed into law on 6 April. The new Act intends to make incorporated societies’ governance functions more robust by aligning director duties more closely with those in the Companies Act. Examples of this include introducing officers’ duties and requirements for dispute resolution processes.
There is a transition period during which incorporated societies will continue to be subject to the 1908 Act until they decide whether they wish to re-register under the 2022 Act or consider alternative options.
Societies that fail to re-register between October 2023 and April 2026 will cease to be incorporated and will be removed from the Register.
Re-registration will involve filing a constitution that is compliant with the new Act.
- Minimum number of members required for an incorporated society is reduced from 15 to 10.
- Consent of each member of the society will need to be collected, for example, by ticking a box when renewing their annual membership.
- Each society must appoint at least one contact person to be contactable by the Registrar.
- Officers have new duties, which include acting in good faith and in the best interests of the society, complying with the 2022 Act and the constitution, and exercising the care and diligence that a reasonable person would exercise in the circumstances.
- The majority of officers on the society’s board or committee must be members of the society and all officers must not be disqualified from being an officer.
- Dispute resolution processes must be included in the society’s constitution and the processes must be consistent with the rules of natural justice.
- New rules define when an officer has a conflict of interest and a duty to disclose conflicts.
- Societies can provide insurance and indemnify officers and employees.
- Simplified financial reporting for small societies. Regulations (not yet been released) will provide further details on the requirements for different sized societies.
What it means for you
All incorporated societies will need to re-register with the Registrar by April 2026 with a constitution that is compliant.
Societies must review their constitution and make any necessary modifications. Societies needing few changes may decide to update, while others may see this as a good opportunity to start afresh.
The Registrar will publish a consultation document around August 2022, with draft regulations based on this feedback available around April 2023.
If you have any questions about these new requirements or if you would like help updating your constitution, you should seek legal advice. Sport NZ will issue guidance notes and templates to assist with this transition.