Restrictions on money-making activities

What you can, and can’t do

New legislation for incorporated societies

Between 5 October 2023 and 5 April 2026 there are 2 Acts in force.

If your society —

  • registered for the first time on or after 5 October 2023, the Incorporated Societies Act 2022 (2022 Act) applies.
  • registered before 5 October 2023 and has reregistered since then, the 2022 Act applies.
  • registered before 5 October 2023 and has not yet reregistered, the Incorporated Societies Act 1908 (1908 Act) applies.

An incorporated society is a non-profit organisation. Any activity your society carries out can make money for the society (but must not make money for the benefit of individual members).

Your society can raise money to help achieve its purposes as set out in its rules or constitution. But it can’t make money to distribute to its members.

If your society employs people, including society members, it can pay them for the work they do. Members can also be reimbursed for actual and reasonable expenses they’ve incurred on behalf of your society.

This information only applies to societies registered under the 1908 Act
This information only applies to societies registered under the 1908 Act

The Incorporated Societies Act 1908 lists some specific examples of money-making activities that may be permissable. These include:

  • A society’s property can be divided among its members when the society is dissolved.
  • Members of a society can receive a salary as an employee or officer of the society.
  • Members of the society can compete with each other at ‘members only’ society events for trophies or prizes, other than money prizes.
  • A member may benefit personally where they would have been entitled to the percuniary gain whether or not they were a member of the society.
  • Where an incorporated society exists to regulate an industry or trade, or to promote better practice, funds raised by the body can be put toward this purpose. The society cannot, however, take part in the industry or trade.

If a society is found to be engaging in operations involving percuniary gain, both the society and its members can be prosecuted and fined. In addition, all members involved may be held personally liable for any debts and obligations incurred by the society.

Incorporated Societies Act 1908 New Zealand Legislation

This information only applies to societies registered under the 2022 Act
This information only applies to societies registered under the 2022 Act

The Incorporated Societies Act 2022 (2022 Act) specifies that societies must not operate for the financial gain of any of its members. The 2022 Act is also specific about what does and doesn’t constitute financial gain.

What constitutes financial gain

A society will operate for the financial gain of its members if —

  • It passes on any gain, profit, surplus, dividend or similar financial benefit to it members
  • It has capital that is divided into shares or stock held by its members
  • It holds property in which its members hold a disposable interest.

What doesn’t constitute financial gain

The 2022 Act sets out a number of scenarios where a society does not have a purpose of being carried on for the financial gain of its members merely because it will or may undertake certain activities. Some of these are:

  • Where a society engages in trade.
  • Where a society pays a member for something that is related to the purposes of the society and the member is a not-for-profit entity.
  • Where a society distributes funds to a member to further the purposes of the society and the member is a not-for-profit entity, is closely related to the society and has the same or similar purposes to the society.
  • Reimbursing a member for reasonable expenses legitimately incurred on behalf of the society or while pursuing the society’s purposes.
  • Where a society pays a member a salary or wages or payment for services or enters into any other transaction with a member on arm’s-length terms.
  • Where a society provides a member with benefits related to the society’s activities such as trophies, prizes or discounts on products or services in accordance with the purposes of the society:
  • Where a society has its surplus assets distributed in accordance with the Act to a member that is a not-for-profit entity.

When society does not have financial gain purpose (section 24 of the 2022 Act) New Zealand Legislation website

Officers can be prosecuted if a society is found to have been operated for the financial gain of any of its members. Additionally, a society can recover a financial gain from a member and the High Court can put a society into liquidation where financial gain is established.

All help topics

Getting started on the register 7 guides

Find out about incorporated societies and the Incorporated Societies Register, and what's needed to register and maintain an incorporated society in New Zealand.

Searching the Incorporated Societies Register 2 guides

Find out how to search our registers for information about incorporated societies, and other entities

Starting an incorporated society 5 guides

To incorporate a society in New Zealand you must submit an application, along with the required documents, and pay a registration fee.

Reregistering under the 2022 Act 6 guides

To remain on the register, existing societies will need to reregister under the Incorporated Societies Act 2022 before April 2026

Running your incorporated society 7 guides

Once you’ve registered, you’ll need to keep your details on the register up to date, and follow the rules that apply to incorporated societies and how they are run.

Meeting your annual filing requirements 3 guides

Once you've registered your incorporated society, you'll need to file annual financial statements. Societies registered under the Incorporated Societies Act 2022 must also complete an annual return.

Keeping society details up to date 8 guides

Once you've registered your incorporated society, you'll need to file annual financial statements and update other society details when they change.

Ending an incorporated society 2 guides

When an incorporated society reaches the end of its 'life', it must be wound up and removed from the register. Here we outline the ways this can be done – by dissolving the society (1908 Act), removing the society from the register (2022 Act) or placing it in liquidation.

Restoring an incorporated society to the register 2 guides

An application can be made to us to have an incorporated society restored to the register, by the society itself, or by a creditor. You'll need to provide evidence to support your application.

Forms and fees 3 guides

The forms you might need to update a society's details, along with the fees that apply and ways you can pay.

Managing your online account 7 guides

To update society details on the Register of Incorporated Societies you need a Companies Office online services account. It's free to set up, but fees apply for some transactions.