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Ending an Incorporated Society

Introduction

Many incorporated societies registered under the Incorporated Societies Act 1908 (the Act) will reach a point when they can no longer operate as a society. This may be because the society is:

• No longer active. For example, the membership numbers have dropped or the purpose the society was set up for has been achieved, or

• It is unable to continue to operate. For example, it is in financial difficulty.

When the society reaches the end of its "life", there are two ways that a society can tidy up its affairs:

• The Registrar of Incorporated Societies can issue a notice dissolving the society if he believes that the society is no longer operating, or

• The society can be placed into liquidation by its members or the High Court. At the end of the liquidation the society will be wound-up.

The effect of the dissolution by the Registrar and the end of the liquidation is to remove the society from the register and end its life as a separate legal entity. As the society is no longer incorporated it can no longer hold property, enter into contracts and it may affect the society’s ability to apply for charitable status for tax purposes.

Dissolution by the Register

If the Registrar is satisfied that a society is no longer operating, he can dissolve the society. This may happen:

• If the society fails to send a copy of its annual financial statements to the Registrar, he may assume it is no longer operating, or

• If the society has no assets or liabilities, an officer of the society can send a request to remove a society to the Registrar advising that it has ceased to operate.

Download the form | Request to remove an Incorporated Society from the register pdf | file size 57Kb

Prior to a society sending the Registrar a request to remove a society form the register, the society should deal with any outstanding assets or liabilities in the way specified by the society’s rules. If this cannot be done, then the Registrar can specify how the assets are to be dealt with.

The Registrar will dissolve the society by publishing a notice in the New Zealand Gazette. The date the notice is published is the effective date of the dissolution. After the dissolution, the Registrar can restore the incorporated society to the Register if he is satisfied that it is still operating, however, there is a $200 fee to do this.

Liquidation

The members of the society or the High Court (on an application from a creditor, society or member) can place the society into liquidation. The required steps for each option are set out below:

Members

If the members of the society decide that the society has achieved its purpose (as set out in the rules), or that they no longer want to continue with operating the society, they can put the society in liquidation using the following process:

1. The members of the society pass a resolution at a general meeting of the society appointing a liquidator (although a liquidator is not appointed immediately)

2. The earlier resolution appointing a liquidator is confirmed at a subsequent general meeting which is called for that purpose and held not less than 30 days after the first meeting

3. A liquidator (or liquidators) will then be appointed by the society and the liquidation will commence.

When the society passes the resolution to put the society into liquidation, it must follow the procedures set out in its rules for calling meetings and making changes to its rules.

The High Court

The Registrar, a member of the society or a creditor of a society may apply to the High Court to have a society put into liquidation. An application can be made in one or more of the following circumstances:

• The society has suspended its operations for the period of a year

• The number of members has fallen below 15

• The society is unable to pay its debts

• The society carries on operation from which members make pecuniary gain

• Any other circumstances which a High Court Judge considers acceptable.

The liquidation process

Once the society is in liquidation, the process is the same as it is for a company under the Companies Act 1993. Effectively, "liquidation" of a society involves stopping the activities of a society, paying its debts and distributing any assets in accordance with the rules of the society. Once a society is removed from the register at the end of the liquidation, it is not possible to restore it again. A list of experienced liquidators can be found in the yellow pages under "Insolvency & Liquidations".

Send Documents to

Registrar of Incorporated Societies
Ministry of Economic Development
Private Bag 92061
Auckland Mail Centre 1020

Find out more about incorporated societies

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Updated 8th September 2005