Update (September 2017) on Incorporated Societies Act Reform

  1. An Exposure Draft of the Incorporated Societies Bill (see Overview of Proposed New Incorporated Societies Act) was subject of consultation (which closed on 30 June 2016), but no Bill has yet been introduced to Parliament. No matter what Government is formed after the 2017 General Election we do not expect any major change to what was proposed in the Exposure Draft Bill as the reforms are not considered to be politically controversial, and we hope the Bill will be introduced early in 2018.
  2. When the proposed new Act is enacted some existing societies may have to reconsider whether they should remain as incorporated societies, and ask itself and its members some searching questions:
    • Why do we have our society, what needs is it meeting, are we fulfilling the wants and needs of our members – fundamentally, what is our “purpose” or “mission”?
    • Do we need a society (with voting members) or might some other type of organisation (perhaps a trust) better meet our needs?
    • Might there be merit in considering combining forces with some other organisation or organisations providing similar community services (such as forming a combined sports club or combined cultural society)?
    • Do we actually need to be incorporated (the main benefit of incorporation for most societies being to protect members from most personal liability for society activities)?
    • If we choose to remain incorporated, how will we meet the greater reporting and accountability requirements of the new Act? Will we need to pay (or increase) committee honoraria or engage some external, paid professional help?
  3. To avoid the pressure of having to revise a society’s constitution during the transitional period after the new Incorporated Societies Act is enacted we have a number of suggestions:
    • Societies being formed now should seek to anticipate the changes by adopting constitutions that comply with the provisions in the Exposure Draft of the Bill (recognizing that some “tweaks” may be required when the new statute comes into force),
    • Existing societies reviewing their constitutions now should consider the issues discussed in paragraph 2 above, and if the review proceeds draft a new constitution that complies with the provisions in the Exposure Draft of the Bill as recommended in the last bullet-point, and
    • All other existing societies should consider the issues discussed in paragraph 2 above, and should then commence reviewing their constitutions now, even if they delay putting a revised constitution to their members until after the new Act is passed.