New Zealand Law Society - Incorporated Societies Bill draft supported

Incorporated Societies Bill draft supported

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The general approach taken in the Exposure Draft of the Incorporated Societies Bill is supported  by the New Zealand Law Society.

In a submission to the Ministry of Business, Innovation and Employment (MBIE) on the Exposure Draft, the Law Society says it strikes a workable balance between providing clear rules and guidance while still maintaining flexibility to adapt to fit the range of societies in existence.

"In particular, the Law Society supports the use of standard provisions which can be voluntarily adopted by societies and which act as a safe harbour for compliance."

However, the Law Society points to some proposals in the draft which it says require amendment.

It says the process for amendment of the constitution should be changed to recognise that some societies may have imposed more stringent voting requirements for constitutional amendments, and also an amendment to permit proxy voting.

The proposed definition of the "committee" does not refer to the management role of the committee, and the Law Society says this should be changed to include it.

The Law Society also recommends that small societies - with fewer than 40 members or a turnover below a specified amount - should be exempted from some compliance requirements. It says this is because some of the proposed reforms would be unduly burdensome on small societies.

The obligation to provide information to members and the increased administrative duties this would entail are likely to discourage volunteers from participating and small societies should be exempt from compliance.

The Law Society recommends that small societies should also be exempted from preparing annual financial statements and an annual return.

"The Registrar may need to undertake spot checks to ascertain whether this exemption is being abused," it says.

"However, this administrative burden will be balanced by the fact that the Registrar would not need to take receipt of the annual returns of each of these small societies."