K3 Insights

The enactment of the Incorporated Societies Act 2022 marks a significant shift in the operational landscape for all incorporated societies across New Zealand, ushering in a new era of compliance and governance. Effective since October 5, 2023, the Act mandates a pivotal requirement: all societies must undergo re-registration by April 2026.

This process of re-registration necessitates a fundamental revision of each society's constitution to align with the provisions of the Act. Notably, any amendments to a society's constitution must adhere to the established rules governing the society's operations. For instance, certain societies may stipulate that constitution revisions are only permissible during annual general meetings.

The key revisions introduced by the Act encompass several pivotal aspects of society governance, including membership criteria, the establishment of governing bodies, officer responsibilities, financial reporting obligations, and language inclusivity, among others. Noteworthy changes include:

• Redefining the minimum membership threshold from 15 to 10 individuals.
• Mandating explicit consent from all new members.
• Requiring the establishment of a governing body comprising at least three individuals, most of whom must be society members.
• Introducing the concept of officers, encompassing committee members, treasurers, CEOs, etc., with duties modelled on the director's duties outlined in the Companies Act 1993.
• Obligating societies to appoint a dedicated contact person, not necessarily an officer, for streamlined communication.
• Setting stringent timelines for Annual General Meetings and financial reporting, enhancing transparency and accountability.
• Emphasizing the utilization of XRB for financial statement preparation, except for societies classified as small.
• Incorporating mandatory provisions into society constitutions as prescribed by the Act.
• Imposing responsibility on society officers to ensure constitutional compliance with the Act.
• Permitting the use of te reo Māori in records, constitutions, bylaws, or other documents.
• Requiring the establishment of procedures for addressing internal disputes.
• Outlining six criminal offenses targeting severe misconduct within the Act.

Non-compliance with the reregistration mandate entails dire consequences for societies. They may face liquidation, seek dissolution, or ultimately cease to exist. Regardless of the chosen course, adherence to the society's existing rules and constitution remains imperative. Ceasing to exist not only strips the committee of decision-making authority but also nullifies the society's legal identity and jeopardizes its name protection status.

In essence, the Incorporated Societies Act 2022 heralds a new era of governance and compliance, reinforcing the foundational principles of transparency, accountability, and inclusivity within New Zealand's incorporated societies.

K3 can assist you with understanding how the new legislation will apply to your society. Please reach out to one of our team if you have any questions.