Incorporated Societies: Something is brewing on the horizon…
As you may be aware, earlier this year the Incorporated Societies Bill was introduced to Parliament. This new Act will replace the long serving but outdated 113 year old current legislation. It aims to provide better accountability and transparency by laying a foundation of basic legal, governance, and accountability obligations.
Why is this important?
The new Act will require all societies to reregister. Failure to reregister within the given timeframe will result in removal from the Register. The final date for reregistration (Transition Date) is 1 December 2025 (or two and half years after the new Act comes into force (Commencement Date)).
What does this mean for your society?
The proposed new Act is currently with the Select Committee which is expected to report back to Parliament by early October this year meaning it could become law by the end of this year or early next year. Although there is a lengthy transition period, there are also a lot of things for your society to consider and get ready.
However, do not panic. After the Commencement Date, your current society’s rules and the current Incorporated Societies Act 1908 will continue to apply until your society registers under the new Act or the Transition Date arrives repealing the existing Act.
What should you do?
The first and foremost task for any society is to ensure they are ready for reregistration prior to the Transition Date. As mentioned above, if a society is not registered under the new Act by then it will cease to exist. That said, it may be restored, but for any society holding land, deregistration is something to definitely avoid. If a society is not restored, its surplus assets must be distributed in accordance with the new Act.
How can we help?
With any new legislation comes a lot of new requirements and obligations. These can be difficult to navigate, so we have set out a few of the most significant changes that will require your attention and careful consideration.
- Compliant constitution (s 22(2)): The society rules must comply with the new Act.
- Officers’ duties (s 49 to s 56): New core duties will be provided, such as the duty: to act in good faith and in the best interests of the society, to exercise reasonable care and diligence; to exercise powers for a proper purpose; to comply with the act and constitution; and not to cause the society to incur obligations that it cannot perform. Officers will be accountable to the society and its members for any breach of these duties.
- Former officer liability (s 46): Former officers remain liable for past acts, omissions, and decisions even after leaving the position.
- Rights/interests (s 27): The society’s constitution/rules cannot give members rights or interests in society property.
- Duty to disclose interest (s 58 to s 60): Officers that are interested in a matter must disclose the nature and extent of the interest to the committee as soon as practicable and record it in an interests register. An interested officer cannot vote or sign any document relating to matter but may participate in the discussion. Failure to disclose an interest.
We have also prepared a short questionnaire that can be used to assess the current status of your society’s rules and processes. Please use the form below to start answering questions.
How ready are you?
Review the following questions and comment on the adequacy of your society’s current rules and processes. To assess adequacy, ask yourself: Are the rules clear and free from ambiguity? Do they capture everything they should? Could they be improved?
We can also help by:
- Creating a specific action plan for your society of what needs to be done;
- Leading workshops for the officers/members to better understand the changes and what they mean;
- Drafting any changes required to be compliant;
- Helping with all stages of registration (pre-registration, registration and post-registration); and
- Providing regular updates and information as it develops.