The new Incorporated Societies Act 2022 (the Act) passed into law on 5 April 2022, replacing its 114-year-old predecessor. There are significant changes and requirements for societies, clubs, and other not-for-profit groups.
The most significant requirement of the new Act is that all societies must re-register with the Registrar of Incorporated Societies no later than 1 December 2025.
To re-register, a society’s rules will need to meet new requirements set out in the Act. While most societies’ rules will already include most of these requirements, it is very likely they won’t include all of them. It is really important that societies get their rules checked and updated to ensure they are compliant. Societies will need to ensure they follow the correct process for amending their rules as well.
The new requirements in societies rules include:
- Dispute resolution procedures, which must be consistent with “natural justice” and align with procedures set out in the Act;
- Processes for keeping the register of members up to date;
- A method for electing a contact person or persons for the society;
- More detail on the composition and procedures of society officers and its committee.
Failing to re-register before 1 December 2025 has a draconian effect: it will mean a society ceases to exist. This could cause serious repercussions for clubs that own assets, or have entered into contracts, or hold bank accounts.
The new Act also imposes additional requirements on society officers and financial reporting.
- Officers of a society now face all the same duties that company directors face when making decisions for a company.
This means that volunteers who help run to run and manage a society may face personal liability for their decisions, if they turn out unexpectedly badly for the society. There may be insurance cover available, but this just comes at extra cost to the society (that it may not be able to fund).
- All societies will have to file annual financial statements. These will need to be professionally prepared, unless a society is a “small” one, with less than $50,000 worth of assets or annual expenses. It’s likely there will only be few “small societies”.
Almost every club and not-for-profit will need to seek specialist advice over what is required to ensure compliance with the new Act and what is needed to re-register to remain in existence. While there is still some time before the deadline date, it’s best to start the process of getting everything sorted to re-register earlier rather than later to ensure the hard deadline is not missed.
Article kindly supplied by Tavendale & Partners
