Key changes for registered charities

How the law changes will affect incorporated societies that are also registered with Charities Services

Incorporated societies that are registered charities will be subject to most of the same changes as those that aren’t. This means, for example, that they will:

have to update their constitutions to set out clear and fair provisions for resolving internal disputes.
have to ensure the majority of the committee members are members of the society.
no longer need to use a common seal.

Reregistering with us

Being a registered charity is not enough to give an organisation its own legal personality – the right to sign contracts, sue and be sued. Only being registered as an incorporated society, a company, a charitable trust or other similar entity does.

For more information about pros and cons of being an incorporated society, refer to one of our ‘Getting started’ help guides.

If an incorporated society that is a registered charity doesn’t reregister with us by April 2026, it will cease to exist.

What ceasing to exist means

When a society is incorporated (becomes an incorporated society), it is effectively 'born'. It can sue, be sued, sign contracts and do all the things any legal person can.

When we say that an incorporated society 'ceased to exist', we mean that it, in effect, 'died'. It can no longer sue, be sued, or sign contracts. The club or association may continue to operate, but that will be as an unincorporated body, which has no automatic rights to the assets of the defunct incorporated society, and which provides no limited liability to its members.

If an incorporated society fails to reregister and so ceases to exist, its debts must be repaid and any remaining assets ('surplus assets') must be distributed according to the terms of society’s rules, a society’s resolution, or the Registrar’s decision.

As a result, all its outstanding debts would need to be paid and any remaining assets would need to be distributed according to its constitution. In addition, the society’s name would lose some of the protection it has under the legislation, because it would become possible for another group to incorporate as a registered society using this name. The society’s members would also lose their right to limited legal liability.

In this context, if the society’s members then create a new entity (such as a charitable trust) or decide to carry on as an unincorporated group of individuals, they would need to re-apply for the registered charity status.

Watch the webinar series run by Charities Services in July this year about the law changes and the reregistration process.

Incorporated Societies Act webinar series Charities Services website

Filing financial statements

Incorporated societies that are registered charities must already use the External Reporting Board’s accounting standards when preparing their financial statements. So the new Act won’t change anything when it comes to preparing and filing financial statements.

Even if an incorporated society fits the criteria of being a ‘small society’, its registered charity status means it will need to keep using the External Reporting Board’s accounting standards.

Incorporated society accounting standards External Reporting Board (XRB) website

Definitions relating to financial reporting New Zealand Legislation website

Filing annual returns

Incorporated societies that are registered charities will continue to send their annual returns to Charities Services, and there will be no need to send them to us.

Using the Constitution Builder tool

The Constitution Builder tool will be updated based on the new Act’s requirements by October 2023. At that time, we will make sure that societies that are registered charities can use the tool to create constitutions that comply with both the Incorporated Societies Act 2022 and the Charities Act 2005.

For more information and assistance, you can get in touch with Charities Services via email or phone. You can also book a Zoom clinic with a member of their team.

Published 24 August 2022

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