Law Commission Report – Establishing and Registering Societies

Status Quo The Law Commission concluded that the existing system for establishing and registering societies is working reasonably well, but recommends some improvements. Minimum membership As the Commission observes “A minimum threshold requirement … is inevitably somewhat arbitrary.” Why section 4, Incorporated Societies Act 1908 set the minimum number of members for a new incorporated society at 15 is anyone’s guess, notwithstanding the fact that there are 15 players in a rugby team. The Commission concluded “that the requirement to maintain a minimum number of members should be clearly stated to apply throughout a society’s existence as a body corporate. If being a membership-based organisation is important, it remains important once a society has been incorporated and commences operating. If the requirement is not on-going then there could even be a possibility of sham or shell incorporated societies. In our view the scheme of the Act is to permit the incorporation and operation of membership-based societies. An on-going requirement to maintain membership at or above the specified minimum level is a necessary part of this scheme.” This “strikes a balance between increased flexibility for small sport and hobby societies as well as social service organisations, while ensuring that incorporated societies remain membership-based.” The Commission’s recommendations are: The minimum membership requirement for incorporation of a society under the new statute should be 10 members, with 10 applicant members to be named on any application for incorporation. Corporate members should continue to count as three members. The statute should provide that: the minimum membership requirement continues after incorporation; a society that falls below the 10 member requirement is not automatically deemed...