Incorporated Societies: Start Preparing for Re-Registration Now Before It’s Too Late!

As we’ve discussed in previous articles, the legal regime for incorporated societies has undergone a major overhaul, and all incorporated societies will have to take action to ensure their continued existence.

The Incorporated Societies Act 2022 (the 2022 Act), which repeals the Incorporated Societies Act 1908, requires that all incorporated societies re-register under the rules of the 2022 Act by the transition date of 1 December 2025. The work that will be required to complete the re-registration process should not be underestimated, and if you haven’t yet begun, you’ll need to get on to it smartly to avoid potentially dire consequences.

The 2022 Act provides that if an incorporated society has not re-registered by 1 December 2025 it will cease to exist as an incorporated society. It can be restored to the register, but if the society is not restored, its surplus assets must be disposed of to one or more not-for-profit entities nominated in its constitution, or in the absence of any such nomination in accordance with specific provisions of the 2022 Act. Further, if the society continues to operate after the transition date, its members and especially its committee may be held personally responsible for the society’s debts and for the consequences of failing to distribute its surplus assets.

As such, all incorporated societies need to decide whether or not to remain incorporated as early as possible to allow them time to complete re-registration before the transition date. In making this decision, it should be recognised that there are very considerable advantages to incorporation:

• An incorporated entity is recognised in law as a separate legal “person” from its members, from which flow the other advantages of incorporation;
• It allows for perpetual succession whereby property is able to be owned in the name of the society, avoiding the need (and cost) to effect and record changes of property ownership;

• An incorporated society can execute documents, enter into contracts, buy, sell, own, lease and rent property, borrow money and give securities, and sue and be sued in its own name;
• The members of an incorporated society enjoy “limited liability”, meaning that they cannot normally be held personally responsible for any debts or other liabilities of the society;
• An incorporated society is much more likely to attract gifts or grants from funding agencies due the reduced risk compared to being unincorporated.

In order to meet the requirements for re-registration under the 2022 Act, virtually every society will have to create and adopt a new constitution. This can be a laborious process, involving drafting a new constitution and circulating it to society members for comment, redrafting the constitution and submitting to the society committee for approval, and finally presenting the constitution to a General Meeting for adoption. At any stage the constitution may be rejected and returned for redrafting. Every incorporated society must then get on to the process as soon as possible to allow time for the process to be completed correctly.

At Freebairn and Hehir Lawyers, we’ve made it our business to become experts in preparing incorporated societies for re-registration. So if you haven’t started the process yet or you could use a hand going forward, feel free to get in touch. Don’t leave it until it’s too late!