Getting ready for reregistering

Transcript

Duration: 36:56

Visuals

The first slide in a New Zealand Companies Office presentation appears with the title ‘Incorporated Societies Act 2022 – Preparing for reregistration’. It carries the New Zealand Companies Office brand along with the Ministry of Business, Innovation & Employment and Te Kāwanatanga o Aotearoa (New Zealand Government) logos.

Audio

The webinar begins with Hayley, an Engagement Advisor with the Ministry of Business, Innovation and Employment (MBIE), speaking to the first slides in this presentation.

Tēnā tatou katoa, and welcome to this webinar on preparing for reregistration under the Incorporated Societies Act 2022.

My name is Hayley, and I am an Engagement Advisor in the Information and Education team here at MBIE. I will start with today's opening Karakia.

Tāwhia tō mana kia mau, kia māia

Ka huri taku aro ki te pae kahurangi

kei reira to oranga mōku

Mā mahi tahi, ka ora, ka puāwai

Ā mātau mahi katoa, ka pono, ka tika

Tihei mauri ora

I'll now hand over to our presenter David Josland.

Hayley hands over to David Josland, a Senior Solicitor with the New Zealand Companies Office.

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A slide setting out the agenda for the webinar appears. The text reads.

Agenda

• Deciding whether your society needs to reregister
• Key processes for your society’s constitution
• Annual financial statements and returns
• Other important information
• Reregistering your society

Audio

Thank you very much, Hayley.

Before we start today's webinar, I'll introduce myself. My name is David Josland, and I'm a Senior Solicitor in the Companies Office which is part of the Ministry of Business, Innovation and Employment.

What we're going to look at today are issues relating to the Incorporated Societies Act 2022, and importantly, the process around reregistering an existing society that's registered under the Incorporated societies 1908 reregistering that under the new Incorporated Societies Act 2022.

We're going to look at things like deciding whether your society needs to reregister. We'll look at some points that you might like to consider when your society and its members are considering reregistration.

We're going to look at some key requirements of your society's constitution in terms of ensuring that it complies with the 2022 Act. We're just going to very briefly mention the fact that societies under the new Act will need to file an annual financial statement and also an annual return.

We're going to look at some other specific information about the reregistration process and what happens when your society is reregistered and things to look out for in terms of making sure that your application to reregister and also your constitution is compliant with the 2022 Act.

We're going to put up some details now about our website.

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A slide appears with the title ‘Resources’. The main text reads

Law Changes Hub — www.societies.govt.nz

Legislation website — www.legislation.govt.nz

Send questions to — engage@societies.govt.nz

Audio

David Josland continues speaking for the majority of this webinar.

And specifically, we've got an Incorporated Societies Law Changes Hub on our Societies website. The website address is on the screen now for you. The things that I'm going to be discussing now are available on that Law Changes Hub website.

I'd also like to point out that you can email us at engage@societies.govt.nz with any questions that you may have about what we are discussing today, and any other questions about the 2022 Act itself.

What I'd just like to say before we go further, is that the information that I'm going to be talking about is of a general nature.

There's a lot of information about the 2022 Act on our societies website. So I'd encourage you to have a look at that.

And there's also, as I said earlier, a specific section on reregistration.

Our office cannot provide you or your society with legal advice, so you may wish to consider seeking professional advice in terms of the requirements of the 2022 Act and the registration process.

But I'd also like to point out that the Act itself and the regulations are available on the legislation website at www.legislation.govt.nz

You'll need to enter the name of the legislation, the Incorporated Societies Act 2022, and also the regulations which are the Incorporated Societies Regulations 2023, into the Legislation website search engine to access that information.

To begin with we want to just briefly mention what the changes are all about. So obviously existing Incorporated Societies in New Zealand have been governed by the Incorporated Societies Act 1908, and it's well over a hundred years old.

The 2022 Act effectively modernises the law for Incorporated Societies, and introduces and sets out some of the latest governance concepts.

It formalises officer duties, provides more detailed guidance on the holding of meetings and what must be presented at meetings of societies, and also how societies should keep records.

It sets out the financial reporting requirements of societies in more detail and also requires societies to have compulsory dispute resolution processes set out in their constitutions.

The Act also allows one or more societies to amalgamate.

It also has new processes for removing and restoring incorporated societies.

It's important to remember now that no new societies can be incorporated under the Incorporated Societies 1908.

All new societies must have an application under the 2022 Act.

The reregistration process that I'm going to talk about in more detail allows existing 1908 Act societies to reregister and become societies under the 2022 Act.

Existing, at the moment, we're in a period of what we call transition. Where existing 1908 Act societies will operate under the 1908 Act until they apply and become reregistered under the 2022 Act. They'll continue to operate under the 1908 Act and their 1908 Act rules until an application is made to reregister, and the society is reregistered under the 2022 Act. That's an important thing to remember. There'll be some new societies that have registered under the 2022 Act and are now considered to be 2022 Act societies going forward, but 1908 Act societies now are in a period of transition for approximately 2 and a half years to reregister from the 1908 Act to the 2022 Act.

Reregistration takes place online on the Societies website, the address of which is on the presentation slide.

This reregistration process is set out in Schedule 1 of the 2022 Act. So if you're using the legislation website make sure you scroll down to the bottom of the Act, and you will see the heading Schedule 1, And the title of that schedule is ‘Transitional Savings and Related Provisions’.

The clauses in this section are sequential of a flow, and obviously an order, in which a society needs to prepare itself to reregister. And essentially it sets out the steps that an existing 1908 Act society needs to take to reregister successfully under the 2022 Act.

As I said earlier, it's important to remember that an existing 1908 Act society is subject to the 1908 Act and its 1908 Act rules until it reregisters.

What we're going to talk about a little later in the presentation is this reregistration process that the transitional provisions permit the movement of a society to the 2022 Act, through the amendment of its existing constitution, or through the development of a completely new constitution, both of which must comply with the 2022 Act. But we're going to talk about this in more detail shortly.

Deciding whether your society needs to reregister

One of the first things that your society and its members need to decide is if your existing 1908 society is, in fact, going to reregister under the 2022 Act. If it chooses to do this, your members and the society need to prepare documentation that complies with the 2022 Act so that you can make a successful application to reregister.

So what should your society do?

First of all your members and the society need to consider the implications of reregistering and the consequences of not reregistering, and I'm just going to talk briefly about some of these now.

Most likely your society and its members will do this in the context of a general meeting following the existing rules for your 1908 society.

You'll also need to consider what changes need to be made to your existing 1908 Act set of rules, or whether your society wants to develop and submit a new constitution that complies with the 2022 Act.

There are some consequences, if a 1908 Act society does not reregister under the 2022 Act. At the moment we're in a reregistration transitional period for approximately 2 and a half years for your existing society to reregister under the new Act.

Now, if your society does not reregister by the 5th of April 2026, it will cease to exist, and the Registrar will remove it from the register.

What you may wish to consider, then, is, if your society decides that reregistration is not an option, the members may wish to consider winding it up now under its 1908 Act rules, and also under the 1908 Act provisions.

This means that either a liquidator may have to be appointed, or the society is wound up in accordance with its rules, and then an application is made to the registrar to have the society dissolved under the 1908 Act.

This will involve dealing with the society's surplus assets and any liabilities that it may have during the winding up process.

Some of the consequences of either winding up the society and having it dissolved, or of not reregistering, and the society ceasing to exist with the registrar removing it at the end of the reregistration period, is that the society will lose its body corporate status.

And further, the society may lose the limited protection that registration under the 1908 Act, provides to the society, so another society may apply to be registered under the 2022 Act, and utilises the name, or a very similar name to the name of your former society.

Because of the loss of body corporate status, any existing contracts that the society may have with third parties will likely be affected. So you'd need to consider that factor as well.

There are other factors that could arise, and if you're at all in doubt about what may happen. I'd recommend that you seek professional advice specific to your society.

Key processes for your society’s constitution

If your society decides to reregister under the 2022 Act it will need to adopt some new processes in its constitution.

So it can either update or amend its existing 1908 Act Constitution under the provisions of the 1908 Act or you can adopt a completely new constitution that complies with the 2022 Act.

You can look at whether you need to make small changes to incorporate what Section 26 of the Incorporated Societies Act 2022 provides, or possibly you could look at drafting a completely new constitution that complies with section 26 of the Act. I'd strongly advise you to look at the requirements of Section 26 on the legislation site, and also the information about constitutions that are contained in our law changes Hub on the Societies website.

What I'd like to do now is just briefly clarify the 2 types of ways that a society can handle its constitutional document during the reregistration process. I've already touched on it, but I just want to make it clearer to you, so that you understand the 2 different options that are available. So fundamentally, the reregistration or the transitional provisions of the 2022 Act are designed to make it easier for your society to reregister, and to give it some flexibility in terms of how a successful application to reregister a society is made. So it gives you the society 2 and a half years to go through this process. And also it sets out different procedures that the society can undertake specifically in relation to adopting a new constitution that complies with the 2022 Act and combines it with your application for reregistration. So I'm just going to talk briefly about this now.

If you were to look at Schedule 1 and the transitional provisions of the Act, you'll notice that there are two clauses in that, in that schedule, clauses 8 and 9.

Now, specifically, these clauses allow an existing 1908 Act society to amend its rules, to facilitate reregistration and that allows a society that is under the 1908 Act currently to amend its existing rules, which the 1908 Act refers to, rules, to make them comply with the 2022 Act. So you can provide that document with your application for reregistration.

Now clause 10 in the schedule says that an existing 1908 Act society may approve a new constitution to take effect on re registration. So this means that an existing 1908 Act society can develop a new constitution completely and then provide that with your application to reregister and that new constitution takes effect on reregistration.

So they are the 2 different types of processes that your society can follow to update its rules or develop a constitution to comply with the 2022 Act Section 26 requirements.

Now. I'm just going to talk generally about what the Constitution must contain, and it contains a lot of additional things that are different to what your 1908 Act society rules may contain.

So the first thing is that they must provide is the election or appointment of a contact person. You can have up to 3 contact people. You provide their names and contact details as part of the application to reregister. Now the name and contact details of this contact person or people are retained by the registrar. They are not made available to the public or put on the public register. They are held by the Registrar so that he can contact societies when necessary. So it's really just ensuring that there's somebody within your society that is available when the registrar may need to contact your society.

And the major change with the 2022 Act is the requirement that your Constitution have provisions for dispute resolution.

The Society is free to develop its own dispute resolution procedures, however, the Act provides for a model set of dispute resolution procedures that your society can adopt and integrate into its constitution.

That is set out in the schedule to the Act, the dispute resolution procedures.

Another fundamental change is this concept of consent. How people can consent to become members of society, so the Act infers that the consent should be an expressed consent, and ideally in writing, so you may wish to develop this or integrate the consent process into your society's membership application.

We don't need a copy of the members consent. That is to be maintained with the Society's membership records, and the Act also sets out the keeping by societies of a membership register, and the Act specifies that this must be maintained at all times by the society. So recording:

• when people join
• when people cease to be members
• changes in members contact details, etc.

There's also the concept of officer consent. This is linked into the officer duties that the Act brings into force. But officers need to consent to become officers, and also, they need to certify that they're not disqualified from holding office as an officer. So, the Act sets out disqualification criteria, and an incoming officer must certify that they are not disqualified from being an officer.

These consents and the certifications should be kept with the Society's own records.

There's also new requirements around maintaining an interest register that needs to be kept up to date in terms of when officers may have interests in, or, interests in matters that the society is involved, and they need to disclose those to the committee.

Annual financial statements and returns

The Act sets out quite comprehensively new financial reporting standards and requirements, and also the requirement that societies provide the registrar with an annual return. And we've designed our website so that those documents can be provided at the same time by societies.

It's important to remember, though, that if your society is registered as a charity with charity services, the Act actually says that you don't need to file the financial statement and the annual return with our office. The documents, only need to be provided with charity services.

The other thing that the Act brings into effect is the rules around the disposal of surplus assets and so when you look at the requirements here, which are set out on our website, but also in the Act itself, is this requirement for societies to nominate in their constitution another not-for-profit  organisation that surplus assets might be can be left to, or need to be left to, or a class of, not-for-profit organisations that the surplus assets are left to.

As I said earlier the financial statements annual return. They can be filed together, but they must be filed all within 6 months of your society's balance date, which is the taken to be the end of the financial year.

And, as I said earlier these can be filed together online on our website.

Other important information

There's some other important things that your society needs to consider when making an application, and, in fact, information that your society needs to provide as part of the application process.

1. So first of all, you need to confirm that the society has a minimum of 10 members. We don't need their names or address details. We just need you to certify that the Society has 10 or more members.
2. You also need a committee that has a minimum of 3 people, and they will be officers of the society.
3. The other thing to remember is this concept of contact person. And so that needs to be set out in the Constitution document in terms of how a contact person might be elected or appointed.

So these are some factors that you need to consider and think about when you're making a decision, or when your members are deciding on whether to reregister your 1908 Act Incorporated Society.

These things might be talked about in the context of your existing Society's general meeting, which obviously the rules of your society will set out how and when such a meeting can be held.

Reregistering your society

Now, the reregistration process is an online process.

• To reregister your society, you're going to need to provide us with the proposed name of the society which most likely will be the existing name of your 1908 Act Society.
• Your Society's amended rules, or new constitution or constitutional document needs to comply with the requirements of section 26 of the Act.
• Remember to provide details of the contact person or persons, you can have up to 3. The details of the contact person or people will not be made available to the public.
• We need to have the names and addresses of each officer, although the officer addresses will not be made available on the public register, they will be held internally by the Registrar. You'll need to confirm that those officers have consented to be officers and have also certified that they're not disqualified from being appointed or elected as officers.
• You need to provide us with your society's registered office address
• And also confirm that the society has a minimum of 10 members.

There's no fee to reregister under the 2022 Act although there is a registration fee for new societies that register under the 2022 Act.

Things to watch out for in terms of making an application and preparing your constitution.

I'm going to stress it again.

Please make sure that your constitution contains the requirements set out in section 26 of the 2022 Act and remember to make reference in that Constitution to the appointment or election of the contact person or people also remember to include, critically, dispute resolution procedures that your society can utilise on an ongoing basis under the new Act.

Another thing to remember is to refer to concepts that are contained in the 2022 Act. So, for instance, don't refer to pecuniary gain, because that's a concept that your existing 1908 Act society will have provisions in its rules to prevent and also the 1908 Act has sections around pecuniary gain. The 2022 Act talks about the concept of financial gain. So that's the term that you should be using in your constitution.

Another thing to remember is you don't need to apply. So if you've got an existing 1908 Act society you should not make an application to register a completely new 2022 Act society. The reregistration transitional provisions have been put in place to allow or facilitate your 1908 Act society to reregister under the 2022 Act. So it's not a case of your existing 1908 Act society making a new application to register as a 2022 Act society, you should use the reregistration process to reregister your existing society.

Make sure that the name of your society is consistently written in your application for reregistration, and also your constitution. So in particular, it could just be little things like if you refer in your constitution to the word incorporated in full, make sure that you use the full word 'incorporated' in your application. And alternatively, if you just use the abbreviation, 'inc' i-n-c in your constitution, make sure you use that in your application, because we will issue you with your certificate of reregistration or incorporation with the name that you specify in your documents, and so we want you to be consistent with the naming conventions for your society, so that we can issue the certificate in the correct full name.

Also make sure that you specify in the winding up provisions, the disposal of surplus assets, you need to either nominate a not-for-profit organisation or a class of not-for-profit organisations.

We've noticed recently that some applications the constitutions referred to giving the surplus assets back to the society, which is not permitted.

Once your society has been reregistered, we will issue a certificate of incorporation for your society that will include details of the reregistration date for your society.

There are a couple of grounds where the Registrar can refuse to register an application. So just make sure that you don't fall into this category. So, for instance, the registrar can refuse to register or reregister a society if its name does not comply with the requirements of Section 11 of the Incorporated Societies Act. So this is where a name might contravene legislation, or as identical, or almost identical, to the name of another society, or a body corporate, or the reserve name of a company, or is likely to mislead the public, or is offensive, or does not include the words 'incorporated' in full, or 'inc', or 'Manatōpū'.

The purposes cannot be unlawful. The purposes set out in your constitution cannot be unlawful, and also the purposes cannot be for the financial gain of members.

An application will be refused if the Constitution does not comply with the requirements of Section 26 of the Act.

I just want to also point out before we finish that, in addition to the resources, on the Law Changes Hub, we have a revised Constitution Builder which is designed and set up to include the requirements of Section 26 of the Incorporated Societies Act 2022, so that Constitution Builder is available through the Law Changes Hub on the site's website, and it's geared now for you to utilise to prepare a constitution that complies with section 26 of the Act.

So if you have any questions about the information in this webinar, feel free to email us at engage@societies.govt.nz

Now, also, if you are unsure about any of the processes that are required for reregistration it may be appropriate for you and your society to seek professional advice around what the 2022 Act requires, and also around the drafting of your constitution to ensure that it does comply with section 26, also around whether your society and its members want to reregister your society, and in terms of what the consequences of not reregistering may be, you may also wish to seek professional advice around those issues as well.

So this brings us now to the end of the webinar, and I'd like to thank you very much for watching it.

I'm now going to hand you over to Hayley, who's going to do our MBIE closing karakia.

David hands back over to Hayley.

Thank you, David. Here is MBIE's closing karakia

Ka hiki te tapu Kia wātea ai te ara

Kia turuki ai te ao mārama

Hui ē, Tāiki ē

Thank you all for joining us today.