Benefits of an incorporated society in New Zealand:
- Separate Legal Entity: The society has its own legal identity, meaning it can enter contracts, own property, and take legal action in its name, protecting members from personal liability.
- Asset Protection: Members cannot claim ownership of the society’s assets. This ensures the assets are used only for the society’s purposes.
- Credibility and Trust: Being an incorporated society enhances reputation and trust among stakeholders such as funders, donors, and the community.
- Continuity: As a separate legal entity, the society can continue to exist independently of changes in membership.
- Tax Advantages: While not automatically tax-exempt, incorporated societies may qualify for tax benefits.
Obligations of an incorporated society:
- Operate in Line with Purpose: The society must act according to its stated purpose and not for private gain.
- Compliance with Laws and Rules: This includes adhering to the Incorporated Societies Act 2022 and the society’s constitution.
- Maintain Financial Records: Accurate financial records must be kept, and annual financial statements filed with the Registrar or Charities Services (if applicable).
- Transparent Governance: Societies must have a clear governance structure, including a committee and officers, and comply with officer duties such as acting in good faith.
- Dispute Resolution: Societies must follow fair and transparent processes to manage disputes, as outlined in their constitution.
- Membership Register: Keep an up-to-date record of all members.
- Reporting Changes: Notify the Registrar of any changes to the society’s constitution, officers, or address.
The combination of these benefits and obligations makes incorporated societies an appealing choice for not-for-profit groups, but it also requires commitment to good governance and accountability.
Contact us today to secure your society’s future with expert compliance assistance
