Important changes and timeframes

The new Incorporated Societies Act 2022 received Royal Assent on 5 April 2022 replacing the very old Incorporated Societies Act 1908.

With 23,000+ incorporated societies in New Zealand, many of us will have some involvement with these organisations and we should be aware of the important changes and timeframes involved in complying with this new legislation.

The 2022 Act provides for a transitional period ending on 1 December 2025. By then every existing incorporated society must have decided whether to retain its incorporated status by seeking reregistration. If it opts to reregister, it must check that its constitution (the rules of the society) comply with the requirement of the new Act; failing to register may result in the incorporated society ceasing to be registered and unable to operate.


New requirements

The new legislation requires incorporated societies to:

  • Introduce a requirement to have a committee with three or more officers;
  • Specify certain factors that will disqualify a person from being an officer, such as being an undischarged bankrupt or being convicted of a crime involving dishonesty within the last seven years;
  • Introduce duties for officers that will result in them having duties akin to those of company directors. All officers must:

- Act in good faith and in the best interests of the incorporated society;
- Exercise their powers for proper purposes;
- Exercise the care and diligence that a reasonable person with the same responsibilities would in the same circumstances;
- Not agree, cause, or allow 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;
- Not agree to the incorporated society incurring an obligation unless;
- The officer believes on reasonable grounds that the incorporated society will be able to perform the obligation when required to do so; and
- Not act, or agree to the incorporated society acting, in a manner that contravenes the 2022 Act or its own constitution.

  • Allow a mechanism for members to obtain information from officers to allow for improved accountability of those officers;
  • Provide for certain criminal offences, such as officers dishonestly using their position, fraudulently using incorporated society property and falsifying records, documents or the Incorporated Societies Register;
  • Prescribe that the annual financial statements must be prepared and registered, and prescribe the required reporting standards that are dependent on the size of the incorporated society;
  • Prescribe that large incorporated societies, as set out in the Regulations (still to be published), are required to have their financial statements audited;
  • Have an ongoing minimum number of at least 10 members (the 1908 Act only requires a minimum number on incorporation). Members must consent to become a member and incorporated societies must ensure they have processes to ask for, and record, that consent;
  • Include a dispute resolution procedure in their constitution.

These changes are significant. Existing societies should start reviewing their position in light of the new legislation as soon as possible.

If you would like some guidance with this process, please get in touch with us. We are here to help.


Disclaimer: All the information published in Fineprint is true and accurate to the best of the author’s knowledge. It should not be substituted for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are the views of the authors individually and do not necessarily reflect the view of this firm. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit being given to the source. 

Content Copyright © NZ LAW Limited, 2022. Editor Adrienne Olsen, e.  p. 029 286 3650