About Incorporated Societies

What is an Incorporated Society?
An incorporated society is a group or organisation that has been registered under the Incorporated Societies Act and, when incorporated, is authorised by law to run its affairs as though it were an individual person. There is a wide range of groups and organisations that have become incorporated societies. These include sports clubs, social clubs, music and cultural groups, special interest and activist organisations. The Act controlling incorporation is the Incorporated Societies Act 1908.

Who may form an Incorporated Society?
Any group of 15 or more persons may apply to become incorporated under the Act. This means natural (i.e. individual) persons or other corporate bodies. If some members of your group are corporate bodies (i.e. incorporated societies, companies incorporated under the Limited Liability Coy Law, charitable trusts incorporated under the Charitable Trusts Act 1957, or a city, district, or regional council), then each of these bodies counts as three persons for the purpose of making the minimum number of 15. [Sections 4 and 29]

An unincorporated body cannot be a member of an incorporated society.

What can an Incorporated Society do?
An incorporated society can do anything provided that:

  • Its activities are lawful.
  • Its activities are not for the financial gain of the members.
  • Its activities are authorised by the "objects" in its rules.

a) Lawful Activity.
Many ordinary activities require approval before they are lawful. The sale of liquor, casino evenings, housie, street stalls, and some raffles and lotteries require prior approval from central or local government agencies and in most cases, licenses. [Section 4(1)]

b) Financial Gain.

Financial gain, (referred to in the Act as "pecuniary gain"), meaning profit-making from a society's activities for distribution to members, is prohibited. This does not mean, however, that a society itself cannot make profits from its activities providing it does not become a trading operation or pursue profit to the exclusion of its objects. [Sections 5 and 20]. Raising money is not prohibited. You can also employ people (including members) to do various jobs. What you cannot do is give out your profits to members.

c) Authorised Activities.

The rules of an incorporated society specify how the society will operate and include a section called the "objects".

These "objects" are the purposes for which the society exists. Unless you include a particular activity as an object (purpose) of the society, you are prohibited from carrying out that activity [Section 19].