Any society of not less than 15 people associated for any lawful purpose but not for pecuniary gain may incorporate under the Incorporated Societies Act 1908.

Examples of groups becoming incorporated under the Incorporated Societies Act include Runanga, Taurahere and Hauora.

The main advantages of an incorporated society are:

• Body corporate status provides for perpetual succession and limited liability
• Incorporated societies must lodge accounts with the Registrar of Incorporated Societies and make the accounts available for public inspection
• Ability to involve the registrar in respect of certain breaches of the Incorporated Societies Act and incorporation rules
• Ability to have clear rules in the constitution

The main disadvantages of an incorporated society are:

• The pursuit of pecuniary gain as an objective is not allowed
• Not appropriate for commercial activities
• Limited flexibility
• Members of the society do not have any right, title or interest in the property of the society
• Distribution of income to members is not permitted

Suitability of an Incorporated Society structure

The incorporated societies structure is not suitable for commercial activities.

An incorporated society is more suited for hapu and iwi organisations whose objectives are social, educational, political or cultural.

What does the board of an Incorporated Society do?

The board makes decisions on behalf of the society. A board's essential role is to lead the organisation safely and successfully into the future. Although incorporated societies are not able to make a profit for the members they still have objectives that need to be met if the organisation is to survive and prosper.

An effective board will contain a balance of experience and skills, follow the philosophy of collective responsibility and communicate appropriately with members.

Last modified: 31/05/2011