Societies Incorporated as Charitable Trust Boards: Options Following the Incorporated Societies Act 2022

A small but significant group of New Zealand societies are incorporated as boards under the Charitable Trusts Act 1957 (CTA).  For many years, new societies with charitable purposes could choose to incorporate either under the CTA or under the Incorporated Societies Act 1908 (ISA 1908).  This article considers the legal options now available to societies incorporated under the CTA.

The enactment of the Incorporated Societies Act 2022 (ISA 2022) materially changed the rules for all societies in New Zealand.  New societies can no longer choose whether to incorporate either under the ISA 1908 (now 2022) or the CTA – new societies can only incorporate under the ISA 2022.  Societies that were incorporated under the ISA 1908 had to re-register under the ISA 2022 by 5 April 2026.  But what about societies that were incorporated under the CTA?  Do they need to re-register?

This article outlines:

1. what a society incorporated as a charitable trust board can do;
2. what has changed under the ISA 2022;
3. whether a society incorporated under the CTA can re-register under the ISA 2022; and
4. whether it should.

What can a society incorporated as charitable trust board do?

Historically, the CTA allowed societies (as well as charitable trusts) to incorporate as a Board. Once incorporated, a Board acts as a body corporate with separate legal personality.  For example, a Board can:

1. hold property and assets in its own name;
2. enter into contracts;
3. sue and be sued in its own right (i.e. members of the Board are not sued personally);
4. operate bank accounts and borrow funds;
5. continue with perpetual succession.

Although a Board may undertake trading activities, profits must be applied to the society’s charitable purposes and cannot be distributed to members.

What has changed under the ISA 2022 for Boards?

New societies can no longer choose to incorporate as a Board under the CTA – they can only incorporate under the ISA 2022.  However, existing Boards remain valid entities and may continue all of the activities they undertook before the enactment of the ISA 2022.  Existing Boards do not need to change in any way.  For example, they can (subject to their own rules) continue to :

1. operate their charitable activities;
2. hold and manage assets;
3. enter contracts;
4. remain incorporated under the CTA.

The enactment of the ISA 2022 does not change how existing Boards operate.  However, the ISA 2022 provides existing Boards with an option to seek re-registration under the ISA 2022, rather than continuing as entities incorporated under the CTA.

Can a Board re-register under the ISA 2022?

Boards of existing societies incorporated under the CTA can still re-register under the ISA 2022 using the transitional provisions in schedule 1 of the ISA 2022.  Although re-registration is no longer an option for societies incorporated under the ISA 1908 (as that option was only open until 5 April 2026) there is no time limit on re-registration for society Boards incorporated under the CTA.  Such Boards can, at present, re-register at any time by completing the re-registration processes set out in the schedule to the ISA 2022.  This option is only available for societies incorporated as Boards under the CTA – charitable trusts cannot re-register under the ISA 2022 to become societies.

Should Boards incorporated under the CTA re-register under the ISA 2022?

Whether re-registration is appropriate for any particular Board is dependent on the nature, purpose and intentions of that Board.

The ISA 2022 is modern legislation that reflects current best practice for operation of incorporated societies.  The Act provides clear guidance for societies and their members and provides a useful framework for society governance and resolving disputes between members.  It does so by establishing detailed rules for the content of constitutions (a requirement for detailed dispute resolution requirements, for example).  The CTA, in contrast, is old legislation focused primarily on charitable trusts, rather than societies.  It provides little guidance on governance issues, the content of constitutional documents or assistance with dispute resolution.  Although this provides more flexibility for operation of societies, it creates more risk of dispute and greater uncertainty for all those involved.

Boards that have operated without problems under the CTA could reasonably take an “if it ain’t broke, don’t fix it” approach and continue as a Board incorporated under the CTA.  However, for Boards that want to update their governance to reflect current best practice and provide more clarity and certainty for members and officers on the Board, applying for re-registration as a society under the ISA 2022 may be the most appropriate course.

Any Board seeking to re-register would generally need to update its constitutional documents (to ensure compliance with the ISA 2022 requirements).  Once its rules are updated, it can apply for re-registration under the ISA 2022.  Following re-registration, the society continues (i.e. it remains the same society) but will be a society incorporated under the ISA 2022, not the CTA.

Please contact us if you would like to discuss your society and the options available to you for re-registration.

This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.