The Incorporated Societies Bill has progressed further through Parliament after completing the select committee process. The Incorporated Societies Bill will replace the Incorporated Societies Act 1908 which is over one hundred years old. This Bill will provide a much-needed update to New Zealand’s incorporated societies laws and bring some significant changes for how incorporated societies are run in New Zealand.
The proposed changes are outlined in the previous article, June 2021, where the introduction of the Incorporated Societies Bill to Parliament is detailed. This article provides an update on the progress of the Incorporated Societies Bill so far, the changes recommended by the select committee and how the Bill will progress from here.
Key recommendations of the select committee
Following the select committee process, the select committee made recommendations on how the Bill should change after hearing public concerns and feedback.
The select committee has recommended the Incorporated Societies Bill be amended to:
- clarify that the rules against financial gain will not affect the ability of incorporated societies to offer hardship grants or scholarships, nor will it affect the ability of umbrella societies to distribute funds to member societies;
- increase the number of incorporated societies categorized as small societies by raising the assets threshold and removing fixed assets from consideration;
- further simplify financial reporting requirements for small societies and allow a more simplified cash accounting approach;
- clarify that the required complaints procedures can be any of a range of different procedure types;
- allow people who are not members of an incorporated society to be committee members, provided a majority of committee members are still members of the society; and
- allow incorporated societies with the same name to be registered at the Registrar’s discretion if the societies consent.
The majority of the proposed changes ensure that incorporated societies may be efficiently run in a way which is commensurate to the size of the society. Incorporated societies can range significantly in size and asset base so flexibility in this regard is supported.
Parliament accepted the recommendations of the select committee on the Incorporated Societies Bill in its second reading on 17 November 2021. From here, the Bill will be further considered by the committee of the whole House and again in its third reading. The debate at each of these stages means that the contents of the Bill may continue to change but once the Bill is passed it will receive royal assent and become law.
As it stands, the Incorporated Societies Bill gives societies until 1 December 2025 or two and a half years from the passing of the Act (whichever is later) to reregister under the new Act. This gives societies ample time to prepare for the changes it will bring.
As the Bill works its way through the Parliamentary process, your lawyer can provide advice on how your society might be affected and the transitional preparations that can help you get ready for when the new Act is in force, such as updating your society’s constitution.