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5 things charities need to know about the new Incorporated Societies Act
Published: 2 June 2022
There are about 24,000 incorporated societies in New Zealand, and about 7,000 of those are registered as charities. Incorporated societies are democratic groups, and like charities, some are large businesses like organisations, and some are small sporting clubs. The Incorporated Societies Act 2022 updates a piece of legislation over 100 years old, and quite a lot has changed.
The Companies Office, which is part of the Ministry of Business, Innovation and Employment (MBIE), administers the Incorporated Societies Register. Over the next few months, we’ll be working with them on education materials to help incorporated societies make the transition to the new Act.
There are some things incorporated societies should be thinking about now.
Find out if you are an incorporated society
You need to know if you are an incorporated society. We are aware not every group knows about its legal structure. Search the Incorporated Societies Register(external link) to see if you are incorporated. It’s a good time to check that your constitution or rules are the same on the Incorporated Societies Register and the Charities Register.
What are the changes about?
The changes make incorporated societies’ structures and processes more robust, help societies govern themselves, and give societies and members more options when things go wrong. In practice, this means you’ll probably need to rewrite your constitution to add the additional requirements of the new Act.
The Act will come into force in stages over four years, so there is no rush. However, now is a good time to look at your constitution or rules and start thinking about what will need to change. The Constitution Builder tool(external link) lets you build a draft constitution to meet the requirements of the new legislation. It will be updated to reflect the law changes by the time societies are allowed to start reregistering next year.
All incorporated societies will need to reregister (from approximately October 2023 to April 2026). When they reregister, they come under the new Act.
From approximately October 2023, all new incorporated societies will need to register under the new Act but until that time, they register under the old Act.
Reporting standards will apply
Once the new Act kicks in, reporting standards (that already apply to charities) will apply to larger incorporated societies. This isn’t going to change your responsibilities if you’re already a registered charity.
As a charity, now is also a good time to think about if being an incorporated society is right for you. We’ve presented a webinar(external link) and written a blog(external link) on the main legal forms of charities, and if they match how you want to run as a charity.
Keep an eye on our newsletter, as more information will be coming out about these changes.