The old Incorporated Societies Act 1908 has been replaced by the Incorporated Societies Act 2022. The new Act is designed to update and modernise the law of societies.
As the name suggests the word “societies” implies something social: people getting together for a common non- commercial activity, where the assets of the activity are not owned personally by any member, in short, a club.
Essentially, the new Incorporated Societies Act, like the Trusts Act 2019, gathers together rules and principles applying to clubs and fills in gaps. If you want to find out what you should do in running a club or what your rights are as a member, have a look at the Act.
The societies are incorporated, hence the name, which means that they have a legal existence outside their members from time to time, just like a company. The rules are called a constitution and the committee that runs the club is like a board of director.
In fact, the duties of committee members are the same as those of company directors. This has caused some to question whether the oversight standard has been raised too high.
Until October 2023 the two Acts run in parallel. After that date, all existing clubs will have to re-register under the new Act. All new societies will have to be registered under that Act as well.
If an existing club fails to re-register under the new Act it ceases to exist. There are some recovery backstops before final extinction. As many clubs have substantial real property assets, resuscitation (if it can be avoided by calendaring) is not a good idea.
The rules for re-registration have not been issued yet but there is considerable information on the new regime Companies Office website.
For most existing societies, the main issues on any rule review will be to check on what financial reporting regime is appropriate, provide for a Companies Office contact person, get rid of seal provisions and most importantly check on the means of dealing with disputes between members and members of the club, from a due process perspective.
Many existing club rules are deficient in that area. More widely, the re-registration deadline (12months or so away) should prompt clubs to review their rules more widely. Are they understandable, do they reflect current practice, do they allow technological assistance in meetings, how is voting undertaken, how is the committee selected and so on. Wider questions can also be asked – what is the prupose of the club and its future, are its objects, powers and purposes accurate and flexible enough to deal with future events and challenges. Lastly, as the amalgamation process is now simpler should the club be looking to combine resources with other clubs for mutual benefits?
In short, change is here and presents an opportunity for reflection and renewal.