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Legal Column
New Incorporated Societies Act 2022
Stephanie Harris and Nicole Warner – Glaister Ennor
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The Incorporated Societies Act 1908 (“1908 Act”) has been replaced. After governing incorporated societies for more than 100 years, there is now new legislation that takes into account modern developments and increased complexities in the sector.
The Incorporated Societies Act 2022 (“2022 Act”) came into force on April 5, 2022. Associated regulations are pending and various provisions in this legislation will come into effect at different times that are yet to be announced. New societies will soon need to be incorporated in accordance with the provisions of the 2022 Act. For existing incorporated societies, there is a transitional period before they are required to enter into the new regime.
All existing incorporated societies will be required to re-register under the 2022 Act. The deadline for re-registration will be the later of December 1, 2025, and the date that is two years and six months after the commencement of certain transitional provisions contained in the 2022 Act. Until that time, existing incorporated societies continue to be subject to the 1908 Act (unless they re-register under the 2022 Act before the expiry of the transitional period).
On re-registration under the 2022 Act, existing incorporated societies will be required to file a constitution that is compliant with the 2022 Act. In some cases, this will require an extensive review of the current constitution and adoption of modifications to ensure the requirements of the 2022 Act are met.
Key changes to the 1908 Act include: the minimum number of members required to set up a society is reduced from 15 to 10 members.
More importantly, an ongoing minimum number of members is required to maintain the society.
In the property development context, consideration needs to be given to the size of the project and number of dwellings. a person must consent to be a member of a society. Being the registered owner of land does not automatically make a person a member.
members have no rights to the assets of the society. Upon removal or liquidation of a society, surplus assets (after all costs, debts, etc. have been paid) must go to a not-for-profit entity (as opposed to the 1908 Act where surplus assets could be disposed of in accordance with the constitution of the society). This means surplus assets cannot be distributed to the members (unless the member, or members, is a notfor-profit entity). Again, in the property development context, careful consideration needs to be given to the appropriateness of utilising a society under the 2022
Act given the nature of the assets concerned. new governance and operational matters concerning committee structures and the mode, method and timing of meetings codifying officers’ duties resulting in officers having duties akin to those of company directors new information dissemination rules to allow for greater financial transparency and accountability of officers new criteria and disqualification factors for officers of the society; and
new sanctions and offences for non-compliance or breach of the 2022 Act.
This is not an exhaustive list of the changes, and each society will have unique requirements to ensure compliance with the 2022 Act.
Glaister Ennor is well placed to assist you navigate this new regime. We can advise you on the limitations and advantages and practical considerations (having regard to your goals) when establishing a new incorporated society or considering the re-registration process.
Please contact Stephanie Harris or Nicole Warner for more information. •
