Law Commission Report – Legal Dealings of Incorporated Societies

Updating the Legislative Provisions Act Corporate Capacity of Incorporated Societies The introductory two sentences of the Law Commission’s chapter on this issue succinctly states its position “Gaining a separate legal personality is at the heart of why societies incorporate. In this chapter we recommend changes to the Incorporated Societies Act 1908 to bring it into line with modern models of incorporation.” Limitation of Liability The Commission recommends that, as in section 13 of the 1908 Act, “The statute should provide that a member is not liable for an obligation of the society by reason only of being a member. The provision should be aligned to that in s 97 of the Companies Act 1993, with the necessary changes.” It recommends a new provision, that “The statute should expressly allow societies to indemnify members and employees who act in good faith in pursuance of a society’s activities, and allow societies to take insurance, if they so wish, for the purposes of that indemnity.” Corporate Capacity At present, incorporated societies only have such legal capacity as is conferred by statute and their constitutions. Drawing on the New Zealand Companies Act provisions and British Columbian legislation the Commission recommends that incorporated societies should have all the powers a of a natural (human) person with some further clarification: The statute should provide that a society has full capacity to carry on or undertake any business or activity, do any act or enter any transaction. The provision should be aligned to that in s 16 of the Companies Act 1993, but it should also state, for avoidance of doubt, that a society has the...