Incorporated Societies – The New Act is Coming – What Should We Do?

16 February 2022

From 16 February 2022, the new Incorporated Societies Act will be in the final stages of becoming law and, depending on the Parliamentary schedule, could be in place sometime in February or March 2022.

What does this mean for the estimated 23,000 societies currently incorporated under the 1908 Incorporated Societies Act?[1]. Do they need to rush to re-register under the new Act? Can they continue to use their current rules/constitution or is a complete re-write required? How much is this all going to cost? What happens if an existing society does not do anything about the new Act?

The first message is, do not panic. The new Act provides for a transition period for existing incorporated societies to re-register under the new Act. At the latest, you need to have applied for re registration by 1 December 2025, so you have almost four years to plan for and implement the transition. Also, until the point that your society re-registers under the new Act, its current rules/constitution will continue to apply with no amendments required.

However, the second message is, don’t leave things until the last moment. Your current rules/constitution are unlikely to meet all of the requirements of the new Act, even if you have had these written or amended recently to take into account the previous versions of the new Incorporated Societies Bill. There will be a process to consider what your rules/constitution should look like on re-registration, to then draft the new or amended rules/constitution, and discuss this with the members of the society. The members of the society will need to approve the new or amended rules/constitution before your society can apply for re-registration under the new Act. Depending on a number of factors, including the complexity of your current rules/constitution, and your membership base, the process may take some time.

As a suggestion, most societies could start thinking about re-registration planning sometime in 2022, and move towards considering what their new or amended rules/constitution might look like sometime in early 2023, with a goal to having this drafted and approved by members late 2023/early 2024.

The new Act contains a number of “rules” and concepts that are not in the 1908 Act. As part of the transition process your society will need to consider how these rules and concepts may apply to your particular circumstances as a society under the new Act, and how you will draft your new or amended rules/constitution accordingly. See our article “Incorporated Societies – The New Act is Coming – What Does It Say?” for more details on this.

As to the costs of re-registration, these could range from “not much” to “quite a bit”. Each one of the 23,000 societies will be different, with varying access to resources and skills (lawyers/accountants as members for example), and different levels of complexity in their rules/constitution and membership base. Those factors are likely to influence which end of the costs scale your society’s re-registration falls under.

Cash costs may include getting expert assistance to understand how the new Act applies to your society, and expert help in drafting the new or amended rules/constitution. While there are likely to be free resources to help a society draft their new or amended rules/constitution, these are unlikely to come with any advice or assistance targeted to the particular requirements of your society. The free resources may be useful for some societies to complete the whole transition process, and may be a starting point for others.

There will be a time cost factor as well as cash costs. A society’s committee (or maybe a dedicated sub committee) will need to spend some time planning for and implementing the transition process and making sure that once started it keeps moving along.

If your society has not applied for re-registration by 1 December 2025, it will cease to exist on that date. This may well be an option for societies that are no longer operating and do not own any assets – the “do nothing” approach to winding up the society. But for societies still operating, have purposes that the members wish to continue to pursue, and/or own assets, the “do nothing” approach is not the one we recommend taking.

If the members of your society are not keen on re registration under the new Act, but there are purposes they wish to continue to pursue, and/or assets owned by the society, there may be other options your society could consider. Letting 1 December 2025 come and go without taking any action at all should not be one of them.

Norris Ward McKinnon can assist in all aspects of your society’s transition to and re-registration under the new Incorporated Societies Act. Please contact us if you would like to discuss these requirements, and/or would like to go on our contact list specifically for Incorporated Societies.

[1]The information is this article is based on the Incorporated Societies Bill as presented at its second reading at Parliament on 11 November 2021. Some details may change prior to the Bill becoming the new Incorporated Societies Act.

Corporate & Commercial Team