The government has changed the legislation on incorporated societies (The Incorporated Societies Act 2022, passed on 6 April 2022), and this has some impact on both the Residents’ Association’s constitution and some of our practices. As a result, we need to change the constitution and have the changes approved by the Annual General Meeting on 11 October 2023.
Areas where the Residents’ Association is impacted and change is needed
The changes we have included are those required under the new Act. There are a small number of changes to existing text for grammatical reasons (e.g. ‘fewer’ rather than ‘less’) that do not substantively change the rules.
We have also added a clause that allows the committee to make minor and technical amendments without having to ask a general meeting for approval. This is to allow the committee to correct spelling mistakes or amend anything required by law. The committee still has to notify members and cannot make the changes if there are any objections.
Members’ consent to join
We have currently operated a fairly loose system of membership. Our constitution says we can charge a membership fee, but says nothing about maintaining a membership list. It describes who is entitled to be a member (anyone who lives in or pays rates on a property in the area represented by the Association) and how membership may be terminated. In practice, we have operated on the basis that anyone who is entitled to be a member is considered to be one, and they have been able to participate in our meetings and events.
Under the new legislation, people have to give explicit consent to be a member. Therefore, we will set up and maintain a membership list. This does not mean we are necessarily going to charge a membership fee — we haven’t felt there was a need for one before, and the situation has not changed.
In practice, we will modify the sheet handed around at our AGM each year, which we use to record attendance, to include the opportunity for people to consent to being a member of the Association — either to join or continue their membership. They would have to provide some contact details (address, phone number and email address). Consent would just be a tick box.
We will also create an online form people can use to join the association.
We will then have to maintain a list of members and have to change the constitution to allow us to hold people’s personal information.
We will also make it clear – not through the constitution – that non-members who are entitled to be members are not excluded from activities or representation. Members have certain rights around voting and participating in meetings. However, we don’t want the status of being a non-member to deprive people of their rights to participate in the Association’s other activities. This is covered to some extent in the Objects, which mention working on the community’s behalf in matters affecting their interests and well-being.
The membership list has to be made available to committee members and members of the association for inspection, but we cannot give access to it to them or any other person unless required by law.
Committee and officers
There are some new restrictions in the Act on who can and can’t be an officer or committee member, and also that an Association has to have a committee. Our current constitution says we have to have a committee, and we have included new requirements in the constitution about limitations on who can be a member.
Committee members also have to declare any interests that might create a conflict of interest and this has to be maintained in a register by the secretary.
Procedure at meetings
Given our experience with COVID lockdowns, we have included the option for people to participate and vote in person at meetings or through an audio or audiovisual link. This allows us to use technology like a phone conference call or suitable and secure audiovisual technology, and some form of secure voting technology.
Documented dispute resolution procedures
We haven’t had one of these in the constitution, so we have developed one. The current constitution does describe how a person’s membership can be terminated, but doesn’t describe any procedures for getting to that point if it was the result of a dispute.
We have added to the constitution some clauses clarifying what we need to do, and referred to the default dispute resolution process that is consistent with natural justice outlined in the Act, so we don’t have to develop our own.
We have also had to include a process for how a person whose membership was terminated by a dispute resolution process could rejoin the society.
Documented recipient of surplus assets
Currently, our constitution says that, if the Association is liquidated, any surplus assets or money shall be “disposed of for purposes in accordance with the Association’s objectives or given to an organisation in New Zealand with similar objects, as determined by the general meeting.” Under the new law, we have to choose one or more not-for-profit entities or class of organisation we can distribute those surplus assets to and specify that in the constitution. Our current constitution covers this situation.
Other changes in the legislation
There are some other changes in the legislation, such as new financial reporting standards (External Reporting Board) and having a contact person for the Association, which we are either doing (in the case of a contact person) or aren’t applicable to us (in the case of new financial reporting standards requirements because we are a small organisation – less than $50,000 in operating payments in the two previous years – our existing processes are sufficient).
What we have to do
We need to present the updated constitution to the Annual General Meeting on 11 October 2023 for approval, and then lodge it with the Registrar of Incorporated Societies.
Law changes for incorporated societies – https://is-register.companiesoffice.govt.nz/law-changes-for-societies/
New Act on Legislation website – https://www.legislation.govt.nz/act/public/2022/0012/latest/LMS100812.html
Incorporated Societies Regulations 2023 – https://www.legislation.govt.nz/regulation/public/2023/0240/latest/LMS891513.html