Our German Desk
The Incorporated Societies Act 2022 (2022 Act) came fully into force on 5 October 2023, meaning incorporated societies can now apply for reregistration under the 2022 Act. Approximately 24,000 existing societies will need to reregister under the 2022 Act to remain on the register. If a society fails to reregister, it will cease to exist.
The deadline for reregistration is not until 5 April 2026. Although this deadline may still seem far away, societies will need to carefully consider a number of matters before applying for reregistration and, if societies leave this too long, it may be problematic in terms of meeting the deadline.
Some key things to consider before reregistration
The 2022 Act was a significant repeal of the 113-year-old Incorporated Societies Act 1908 (1908 Act) and imposes many new requirements on societies. As such, there are a number of matters that societies will need to consider prior to applying for reregistration. We have set out some key changes below.
Constitution
Before applying for reregistration, societies must adopt a new constitution that is compliant with the 2022 Act. Although societies were required to have rules under the 1908 Act, the 2022 Act has more extensive requirements of what must be included in a society’s constitution which includes different mandatory provisions than the 1908 Act. Societies will need to review their current rules and make the necessary amendments in order to put in place a constitution compliant with the 2022 Act.
Committee
All societies will need to establish a committee to manage the operation and affairs of the society. The committee must be comprised of three or more officers who are qualified to be appointed. A society’s constitution will need to outline the composition, roles, functions, powers and procedures of the committee, which was not required under the 1908 Act.
Dispute Resolution
Societies will also need a dispute resolution process, and this must be included in its constitution. Given there was no explicit requirement for a dispute resolution process under the 1908 Act, we anticipate that many societies will need to consider, and adopt, these procedures.
Surplus Assets
Under the 1908 Act, surplus assets could be given to any party in accordance with the rules of the society on it winding up. Under the 2022 Act, surplus assets must be given to an identified not-for-profit organisation or class of organisation that is identified in the constitution. This is a significant change, and it may be an area subject to some debate by members. It may also mean that members wish to consider whether reregistration under the 2022 Act is appropriate for their society, or whether an alternative structure (such as a company) should be used going forward. For further information on this point, please see our earlier article.
Looming deadline
As mentioned above, the deadline for reregistration is 5 April 2026. At the time of writing, this gives societies just under two years to reregister under the 2022 Act. This may seem like a long time. However, societies will need to consider whether reregistration is appropriate for them and, if so, prepare a constitution that members agree on, and then take steps to comply with that constitution and the 2022 Act. This will all take some time as there is a lot to do.
Further, many societies may wish to obtain feedback from members and, if appropriate, approve the constitution, at their annual general meetings. If this is the case, it is likely that there will only be two annual general meetings during which they have an opportunity to do so, given the deadline is less than two years away.
In summary, if a society has not already commenced the process of considering reregistration under the 2022 Act, we recommend that they do so sooner, rather than later, to ensure members have sufficient time to carefully consider, and agree on, these important governance changes.
If you have any questions or would like our assistance with regarding the 2022 Act and reregistering your incorporated society, please get in touch with our Corporate and Commercial Team or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
