Law Commission Report – Why we have an Incorporated Societies Act

Legislative Origins The Law Commission’s recent report on the Incorporated Societies Act 1908 reason behind the 1908 records that the then Chief Law Drafter, John Salmond, explained the 1908 Bill: The object of the Bill, as of the repealed Act, is to provide a simple method by which societies established for any purpose other than pecuniary gain may become incorporated. In recent years the Unclassified Societies Registration Act, 1895, has been extensively made use of by societies of a much more complex and important character than those for which the Act seems to have been primarily designed, and numerous deficiencies in the law have consequently come to light. The present Bill is an attempt to make a more adequate provision for the incorporation, management, control, and dissolution of societies to which it relates. The Commission’s Report then goes on to note “John Salmond referred to the need to essentially modernise the 1895 Act because of the range and nature of organisations seeking incorporation under it. We now believe that the 1908 Act should again be updated to take account of changed times, as well as a different appreciation of what is needed from an incorporation statute. … John Salmond produced a modern corporation statute in 1908 terms, but he did not deal with issues that have since become important in relation to incorporations, for example, the abolition of the ultra vires doctrine. Nor did he make explicit, in a way we believe a modern law drafter would, the duties that lie on those who run incorporated societies. He did not attempt to deal with how disputes were to be...

Be Aware – Probable New Incorporated Societies Act

Law Commission Report On 1 July 2010, the then Minister of Justice sought from the Law Commission a “first principles” review of the Incorporated Societies Act 1908, commenting that the then 102 year-old Act was “uncomfortably old.” The Commission’s Issues Paper 24, published in June 2011, provoked over 200 submissions from individuals and small societies through to some of the biggest New Zealand societies and a number of professional organisations. In early 2012, a Reference Group was established to assist the Commission (and I should disclose my membership of that Group). First principles review The Commission’s “first principles” review of the current legislation, and the primary principles guiding its recommendations are (page 4 of the Report): Societies are organisations run by their members. This means both that members have primary responsibility for holding societies to account, and that a group without members to hold it to account should consider an alternative form of incorporation. Societies should not distribute profits or financial benefits directly to members. This is one of the key features that sets incorporated societies apart from other forms of incorporation. People join societies to achieve a shared purpose, not to personally profit financially from the activities of the society. Societies are private bodies that should be self-governing and largely free from inappropriate state interference. Societies value the flexibility that the current regime gives them to adapt their operating environment to suit their purposes and their culture. That flexibility should be retained as much as possible. The Commission’s Report 129, “A New Act for Incorporated Societies,” was tabled in Parliament on 21 August. Law Commissioner Professor Geoff McLay...