The Incorporated Societies Act 2022 (the “new Act”) recently received Royal Assent, resulting in significant changes for the 24,000 incorporated societies in New Zealand. The new Act replaces the Incorporated Societies Act 1908 (the “old Act”), which has been long overdue for an upgrade. We have discussed ten key changes for incorporated societies to be aware of in our article here and provided a lot of detailed information in the form of articles and seminars here. Contact us for a copy of our comprehensive handbook.
All incorporated societies will be required to reregister under the new Act, so it is a chance to revisit all aspects of these organisations. Section 26 of the new Act sets out what a society’s constitution must contain. This is important as the society’s constitution must comply with the new Act in order to reregister. We have detailed notes on the reregistration process here and are helping many comply with the requirements.
In a series of six articles we have set out the key requirements for your society’s updated constitution, as prescribed by section 26 of the new Act. This article will discuss what your constitution needs to provide in relation to membership.
Number of members
Membership is a key point of difference for incorporated societies compared to other legal forms. It is a source of strength as a member led organisation can draw on the enthusiasm of its member base.
Under section 74 of the new Act, a society must have at least 10 members to register as a society. This is a decrease from the 15 members required under the old Act.
A body corporate is still treated as being 3 members for the purpose of determining the number of members, as per section 14 of the new Act.
There was no continuous minimum membership requirement under the old Act, but section 74 of the new Act dictates that a society must have at least 10 members at all times. This will be something that societies need to keep an eye on – especially smaller ones.
Under section 75 of the new Act, if a society has fewer than 10 members the Registrar may intervene and give the society six months to increase its membership. If the society fails to increase its membership, the Registrar may apply to the High Court to put the society into liquidation or remove the society from the register.
Section 26 of the new Act does not require a society to include the membership minimum in its constitution, but it may wish to do so because of the consequences of falling below 10 members.
Both the old Act and the new Act provide that a society’s constitution must set out how a person becomes a member of the society and how a person ceases to be a member of the society.
The new Act stipulates that a society’s constitution must contain a requirement that a person consents to being a member of the society. Consent is required under section 76 of the new Act, which also explains the consent of a body corporate may be given on its behalf in writing by a person acting under the body corporate’s express or implied authority.
Under section 79 of the new Act, a society must keep a register of its members which contains the following details for each member:
- last known contact details (which at least includes a phone number, along with a physical or email address);
- the date on which they became a member; and
- any other information prescribed by the regulations (if any).
The society’s register must be updated as soon as practicable after the society becomes aware of the need for an update. The society’s constitution must include its arrangements for keeping its register up to date according to these requirements set out in section 79 of the new Act.
With the new Act comes a lot of changes to the requirements for an incorporated society’s constitution. We have helped many incorporated societies over the years and would be happy to discuss your situation with you, especially when it comes to amending your society’s constitution so it meets the requirements set out in the new Act. You can contact us any time by email or phone.
We have a lot more resources at this page dedicated to the Incorporated Societies Act 2022.
This article is not a substitute for legal advice and you should consult your lawyer about your specific situation. Please feel free to contact us at Parry Field Lawyers:
- Steven Moe, Partner – email@example.com
- Yang Su, Senior Solicitor – firstname.lastname@example.org
- Michael Belay, Solicitor – email@example.com
- Sophie Tremewan, Solicitor – firstname.lastname@example.org
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