Update from MBIE

At this stage we are working towards the Bill being introduced into the House in 2018, with a view to enactment in 2019. The new legislation will then likely come into force in two steps – in 2021 and 2023.

The Registrar of Incorporated Societies will place guidance on the Societies and Trusts website well before the new legislation comes into force.

If you have any questions please email societies@mbie.govt.nz.

From Denise Lormans, Manager Southland Community Law Centre and Chair Community Networks Aotearoa

In 2013 the NZ Law Commission wrote a paper entitled “A New Act for Incorporated Societies”. The Government agreed that change was required and also agreed with the majority of the suggested changes.  The third draft of the legislative bill that is driving the change is now out, along with an exposure draft that is being processed by the Ministry of Business, Innovation and Employment.

The main things that will affect current Incorporated Societies are:

  • A reduction in the required number of members in order to be an Incorporated Society (Inc) to 10 from 15
  • No Inc. may make financial gain for its members. The law relating to this has been strengthened with some hefty fines being levied toward any offending member and/or Society.  Inc.’s can also recover any financial gains that members have received.  The Registrar of Incorporated Societies may also apply for proceedings and a Court Order to recover such gains.
  • Regulations that will come with the new Act will require all 10 members to be named on any application for incorporation.
  • The new Act also deals with minimum requirements within constitutions. This is a good move in my view as in my work I have seen an enormous variation in constitutions, many of which are simply inadequate.
  • We have already developed a template (available soon via the CNA website), to help re-write these documents for those organisations with constitutions that were written in the last century (!), and which will not comply with the new Act.
  • Included within the new requirements is a clear definition of the Management/Executive Committee, along with the requirements covering complaint or dispute resolution.
  • Liquidation or Winding Up clauses must also comply with the requirements of the new Act.
  • Amalgamation or merging of two (or more) Inc.’s into one entity will be easier than it is now.
  • Each Inc. will have to have a “Contact Officer” within their Management/Executive committee.  This person will be the point of call for all communication with the Registrar of Incorporated Societies

The good news is that all changes will have a lengthy “Transition” period of at least two years.  This will enable all Inc.’s to take time to revise their constitutions and ensure that they comply with the requirements of the new Act and Regulations once they are passed and put into place.

For further information about changes to the Incorporated Societies Act, download and listen to Ros (Community Networks Aotearoa) interview lawyer Mark von Dadelszen. Mark is a Partner with Bannister and von Dadelszen and specialises in societies and charitable trusts.

Radio Interview https://accessradio.org.nz/Programmes+and+Podcasts/Collaborative+Voices#.VwWX66R97IV Even more info https://www.bvond.co.nz/index.php/overview-of-proposed-new-incorporated-societies-act/