Incorporated Societies Bill closer to introduction
26 June 2019
The Government has agreed to update legislation that applies to the more than 23,000 incorporated societies that operate in New Zealand.
“The Incorporated Societies Act 1908 is more than 100 years old, outdated and focuses largely on the formation and dissolution of incorporated societies,” James Hartley, General Manager of Commerce and Consumer Affairs at the Ministry of Business, Innovation and Employment, says.
“A draft Incorporated Societies Bill, which will replace the original Act, went through consultation in 2015. Cabinet has now signed off on some changes to that draft.
“The new Incorporated Societies Bill will enable incorporated societies – which include everything from netball and rugby clubs to Rotary groups – to run more effectively. The Bill provides an operating environment that meets current and future needs so that incorporated societies can thrive. It also helps society members to more effectively hold their members to account.”
Mr Hartley says the new Bill reflects public feedback, which was supportive of the need for change.
“The feedback we received highlighted some important updates that were needed, so I am pleased this new Bill provides long-term assistance and improved clarity around the requirements to run an incorporated society.”
The Bill is expected to be introduced to Parliament later this year.
• The draft Bill originally required all incorporated societies to prepare their financial statements in accordance with the accounting standards set by the External Reporting Board. Following the recent Cabinet decision, the draft Bill will be changed so that only societies that meet certain financial thresholds will have to do so.
• The draft Bill now requires existing incorporated societies to transition and comply with the new regime within two-and-a-half years of when the legislation is passed.
• During that transition period, societies will need to communicate their wish to be re-registered under the new Act to the Companies Office (for example, when they submit their financial statements).