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The Incorporated Societies Act 1908 is uncomfortably old and has been little amended since its enactment. Yet the rich tapestry of community organisations that use this legal form is extensive in New Zealand. Practising lawyers are often called upon for advice concerning incorporated societies. They are asked for advice on whether to set one up, how to set one up, how to register it and what to include in the documents. Difficult questions frequently arise around the governance and administration of such organisations and the resolution of their internal disputes. Many of the reported cases revolve around such disputes. This review will take a first principles look at the Act.
An Issues Paper, Reforming the Incorporated Societies Act 1908, was published in June 2011 with submissions due at the end of September 2011. Over 200 submissions were received. Work on recommendations for the final report has begun and the report is expected to be published at the end of 2012.
Introduction to the review
Listen to Professor Geoff McLay speak on Access Radio, Collaborative Voices programme 4 August 2011
produced by Access Radio Wellington
References to the review in the media
Hayes Knight 'Changes are on the horizon for Incorporated Societies' 17 February 2012
NZLC IP24 Reforming The Incorporated Societies Act 1908
Obtain a Hard Copy
Available online only.Published 22 Jun 2011
Currently much of the not-for-profit sector in New Zealand is governed by the century old Incorporated Societies Act 1908 – an Act which the Law Commission argues is in need of major reform.
Professor McLay said preliminary consultation and research suggested there were a number of problems with the old Act including the lack of adequate processes for dealing with conflicts of interests and resolving internal disputes.
“Getting basic governance structures right, understanding what is appropriate conduct for those who govern societies, and providing for suitable mechanisms for resolving disputes is critical for all organisations, especially those which seek government or other sponsorship.
“The 1908 Act, in our view, does not require societies to ask the appropriate questions when they are being set up. Nor does it provide incentives for already existing societies to improve.”
The Commission is seeking feedback on a range of issues and options for reform raised in the paper including:
-Whether all societies should, as a condition of incorporation, be subject to certain minimum governance rules that they cannot vary;
-Whether a new Act ought to provide a code that makes the obligations of committee members clearer;
-How the Act should provide for the resolution of disputes between members and their societies;
-What rules societies ought to be required to have in their constitution, and the nature of those rules.
The Commission also considers whether a new Incorporated Societies Act should also replace the ability to incorporate under the Charitable Trusts Act.
Submissions on the paper closed on 31 October 2011.
NB: This is an online paper only. There are no hard copies available.
