A Closer Look at the Incorporated Societies Bill - Part 3

5 May 2021

This article is the second in a series which aims to look a little closer at the Incorporated Societies Bill, highlighting areas of interest and potential change that clubs and committees need to be aware of.

This week will focus on Part 6 - Register, regulations, amendments and other miscellaneous provisions.  It will also look at Schedules 1-4.

Click here to view the first update covering parts 1-3 of the Bill

Click here to view the second update covering parts 4 and 5 of the Bill

Note: Clubs New Zealand is preparing a submission on behalf of member clubs.  We encourage management and committee to review the Bill independently, and we welcome your feedback on anything that you believe should be addressed within the Clubs New Zealand submission.

Part 6 Register, regulations, amendments, and other miscellaneous provisions

Subpart 1 - Register of incorporated societies

Register Established

Clause 222 establishes the register of incorporated societies (the register). The register provides information to the public about societies and assists the Registrar and other people to perform functions under the Bill and other Acts (see clause 223). Amendments to the register may be made under clause 226.

Clause 224 sets out the contents of this register. They include the constitution for each society, the names of its offices, its registered office, and its financial statements.

Clause 225 allows the Registrar to remove information from the register or to restrict public access. This is similar to a provision in the Charities Act 2005.

Clause 227 allows the Registrar to set requirements for how information must be registered. The Registrar may refuse to register information if these requirements are not complied with.

Searches of Register

Clauses 228 to 230 provide for searches of the register.

Registrar of Incorporated Societies

Clauses 231 to 234 provide for the Registrar of Incorporated Societies to be appointed, for the functions of the Registrar, and a power to delegate functions, powers, and duties.

Registrar's Powers of Inspection

Clause 235 gives the Registrar (or an authorised person) certain inspection powers. The Registrar may exercise the powers for the purpose of ascertaining whether officers and societies are complying with the Bill, ascertaining whether to exercise a power, or ascertaining whether there has been a contravention of the Bill. The powers include requiring any person to produce for inspection documents that contain information about a society (see clause 236). A person commits an offence if they fail to comply or if they obstruct or hinder the Registrar (see clauses 236 and 237). These offences have a maximum fine of $10,000.

Clause 238 provides that an authorised person may disclose information only in accordance with certain rules.

Clause 239 provides for an authorised person’s report to be admissible as evidence in court proceedings.

Appeals against Registrar's decisions

Clause 240 allows most acts or decisions of the Registrar under the Bill to be appealed to a District Court. This appeal right does not apply to decisions to take certain enforcement actions under Part 4 or to decisions about the distribution of a society’s surplus assets when it is removed from the register or is liquidated.

An appeal relating to the Registrar’s inspection powers does not prevent the Registrar from continuing to exercise those powers (see clause 241).

Sharing of information relating to Charitable Entities

Clause 242 provides for the Registrar and the chief executive under the Charities Act 2005 to share information relating to charities (to assist with the performance of their respective functions).

Subpart 2 - Jurisdiction

Clause 243 provides for the power of the District Court to deal with matters under the Bill. In addition to hearing appeals against the Registrar’s decisions, the District Court can deal with applications for orders if, for example, the amount claimed or the value of the property in dispute does not exceed $350,000 (or no amount is claimed and there is no property in dispute).

Clause 244 gives the High Court power to deal with any applications for orders under the Bill and to hear appeals that arise from proceedings in the District Court.

Subpart 3 - Regulations

This subpart allows regulations to be made for various purposes. These include, for example,—

• prescribing the manner in which applications for incorporation must be made; and
• prescribing procedures, requirements, and other matters for the register of incorporated societies; and
• prescribing fees and other amounts payable to the Registrar; and
• specifying matters for the purposes of subpart 4; and
• prescribing transitional and savings provisions to facilitate an orderly transition to this Act (see also Schedule 1).

We obviously do not see these regulations prior to the Bill passing so will need to closely watch the development of these regulations and any consequences that may come with them.

Subpart 4 - Conversion of entities into incorporated societies

This subpart provides for a body corporate or other association that is formed or incorporated by or under another Act to apply to be reregistered as an incorporated society under this Bill.

This power applies only if the other Act is specified in regulations made under clause 245(1)(o). Regulations may also—

• specify preconditions that must be met for an entity to reregister; and
• specify terms and conditions that must be complied with after an entity has reregistered.

The power to specify terms and conditions will help to ensure that any ongoing duties or requirements imposed by the other Act can be preserved. Clause 249 provides for the court to enforce those terms and conditions. The Registrar may also remove a society from the register if it fails to comply with those terms and conditions.

Schedule 3 sets out matters relating to the process for reregistration.

Subpart 5 - Amendments to Charitable Trusts Act 1957

This subpart amends the Charitable Trusts Act 1957 (the 1957 Act). The main effect of the changes is described as follows:

• after clause 252comes into force, a society may longer apply to be incorporated as a board under the 1957 Act. Instead, an application for the incorporation of a society may be made under this Bill (trustees of a trust may continue to apply for incorporation as a board under the 1957 Act):
• an existing society that is incorporated as a board under the 1957 Act may continue to be subject to the 1957 Act indefinitely if it so chooses. Alternatively, the existing society may choose to reregister as a society under the Bill.

Subpart 6 - Repeal, revocation, and consequential amendments

This subpart provides for—

• the repeal of the Incorporated Societies Act 1908 (the 1908 Act); and
• the revocation of the Incorporated Societies Regulations 1979; and
• amendments to other Acts.

Schedule 1 - Transitional, savings, and related provisions

Schedule 1 provides for transitional provisions. In particular, the schedule sets out how existing societies under the 1908 Act or the 1957 Act become societies under the Bill.

The transitional process for incorporated societies is summarised as follows:

• the society continues to be subject to the 1908 Act until it reregisters under the Bill or until the transition date, which is the later of—
  • 1 December 2025; and
  • the date that is 2 years and 6 months after the commencement of certain transitional provisions:
• during the period before the transition date, the society can amend its rules and make other arrangements to facilitate a transition to becoming a society under the Bill:
• the society may apply to be reregistered under the Bill before the transition date. The society will be reregistered if it meets the requirements for incorporation under the Bill:
• the 1908 Act is intended to be finally repealed on the transition date. If a society is not reregistered under this Bill, the society will cease to exist. It may be restored to the register in accordance with the Bill. But if the society is not restored, its surplus assets must be distributed under the Bill.

The transitional process for the 1957 Act is summarised as follows:

• no new societies may be registered under that Act:

Existing societies may choose to register under this Bill or may continue to be subject to the 1957 Act indefinitely.

Schedule 2 - Disputes procedures that are presumed to be consistent with rules of natural justice

Schedule 2 sets out disputes procedures that are presumed to be consistent with the rules of natural justice. A society is not required to include these procedures in its constitution. However, if it does include consistent procedures, those procedures are presumed to be consistent with the rules of natural justice.

This schedule is something that Clubs New Zealand has previously submitted in favor of.  We see this schedule as providing clear guidance to societies on what is expected of disciplinary procedures.

Schedule 3 - Conversion of entity into incorporated society

Schedule 3 sets out the procedure for allowing an entity that is formed or incorporated by or under another Act to convert into an incorporated society.

Schedule 4 - Amendments to other acts

Schedule 4 sets out amendments to other Acts.

Behind the Scenes

Clubs New Zealand's priority at this stage is preparing the submission on behalf of members. 

From there we will look to begin reviewing the Clubs New Zealand constitution and the model constitution.  We will also look to fully understand the day to day administration requirements that this Bill looks to impose.

As we get closer to the Bill being passed into law we will need to understand the time frames and requirements for clubs to register under the new act.

Clubs New Zealand will then need to update our resources, guidance and training to cover the new Act.

We would love your input

The Clubs New Zealand submission is on behalf of our members and so we would love to hear your input, your feedback or your concerns so that we can ensure they are covered within the submission.

If you would like to provide input, feedback or you have concerns please get in touch with lucy@clubsnz.com