Registrar’s Dissolution of Societies and Charitable Trusts

2011 Article, updated January 2018   Amending legislation in 2010 With effect from 6 July 2010, both the Incorporated Societies Act 1908 and Charitable Trusts Act 1957 were amended.  The primary focus of those amendments was on the Registrar’s power to dissolve societies and charitable trusts (other minor amendments have little impact on societies and trusts).  Most significantly, section 28, Incorporated Societies Act 1908, and section 26, Charitable Trusts Act 1957, are now expressed in effectively identical terms.  (The closeness of the phrasing has, however, led to a legislative error.  In the Charitable Trusts Act a charitable society or trust is referred to as a “Board,” with section 26(1) correctly using that expression, but sub-sections 3 and 6 incorrectly refer to the entity dissolved as a “society.”) Declarations of dissolution Now, under both Acts, if the Registrar is satisfied that a registered entity “is no longer carrying on its operations” or “has been registered because of a mistake of fact or law” the Registrar may make a declaration of dissolution that the entity is dissolved. Then the Registrar must: Record the dissolution in the Register, and Publish the dissolution in the Gazette and on www.societies.govt.nz for not less than 20 working days. Section 26A to the Charitable Trusts Act now echoes section 26(4), Incorporated Societies Act, in providing that failure to respond to a registered letter addressed to an entity’s registered office provides that Registrar with grounds to conclude that the entity “is no longer carrying on its operations.” Reversing a dissolution Both Acts contain a “slip clause,” with each subsection 4 providing that “If the Registrar is satisfied that a declaration of dissolution...

Reforming Incorporated Society and Charitable Trust Law

2011 Article, updated January 2018 Is there a problem with the legislation? Practitioners regularly advising on society and charitable trust issues will be aware of the inadequacy of the legislative framework for the governance and management of incorporated societies and charitable trusts.  The Incorporated Societies Act 1908 is over a century old, and the Charitable Trusts Act 1957 was enacted more than five decades ago.  Much has changed in that time, but little has been done to keep these statutes up-to-date, leading me to assert in an earlier article “With the statutes providing for the incorporation of societies and charities being, respectively, over a century or over half a century old, there should be Parliamentary attention given to enacting minimum standards of governance required of voluntary sector entities.” The Companies Act 1908 was replaced with the 1933, 1955, and 1993, and all of those statutes were themselves extensively amended many times, and there is much legislation applying to companies that is found in other statutes.  In contrast, there have been just six Incorporated Societies Amendment Acts (1920, 1922, 1953, 1993, 2005 and 2010), and only three Charitable Trusts Amendment Acts (1993, 2007 and 2010).  My last article highlighted the modest changes made in 2010, as well as mentioning that more could be done. Reform in prospect I am no great fan of constant changes to legislation, but the legislation governing the voluntary sector in society is seriously out-of-date.  That may not seem important for tiddlywinks clubs, but the reality is that, collectively, recreational, social welfare and educational entities control many millions of dollars worth of assets (some owned by local...