Information about Incorporated Societies

[Boyd Chester-Freeman]

Hi All

For those that are interested I have condensed the information about forming an incorporated society on to this 19 page document.

For those not that interested in reading it here's a basic summary:

What if a society is not incorporated?

A society does not have to be incorporated for its members to operate.  Before you decide whether to incorporate or not, you should consider the following issues. 

• An unincorporated society is based on an agreement (contract) between the members, that changes when people join or leave.  The society does not have an existence separate from its members.
• Members of an unincorporated society can be held liable for the debts of the society. 
• A society that is not incorporated cannot sue or be sued in Court.  Any Court action would either be taken by, or against, the members individually. 
• An unincorporated society cannot own property or enter into contracts. 
• If a society is not incorporated it is not required to have rules to govern it.  This can become a problem if there are disputes about how the society is run.
• There are problems in gifting property (including money) to a society that is not incorporated.
• A society that is not incorporated cannot use the word ‘Incorporated’ at the end of its name.

 

What are the advantages of becoming an incorporated society?

There are several advantages of becoming an incorporated society:

• A society becomes a separate legal entity once incorporated.
• An incorporated society can lease, rent, buy and sell property, borrow money and enter contracts in its own name.  No member of the society can have personal rights or interests in any of the assets of the society.
• An incorporated society will continue as a separate entity even though its membership changes.
• Members will not be personally liable for the debts, contracts or other obligations of the society unless:
• The debts or obligations are incurred from activities undertaken to obtain money for pecuniary gain (profit), in which case every member involved will be personally liable for those debts or obligations; or
• The debts and obligations are incurred through unlawful activities, in which case every member involved will be personally liable for those debts or obligations
• Because the rules governing the incorporated society must meet the minimum requirements set out in the Incorporated Societies Act 1908, members can be assured that there will be certainty to the way the society is run.
• An incorporated society may be entitled to an income tax exemption. 

Regarding tax exemption, as we are not an incorporated society and we have no tax exemption, the Admission fees from the Faire are taxable.

To be an incorporated society, we will need 15 members to sign the application form, and currently a fee of $102.22.

Cheers

--
Experience is not what happens to a man; it is what a man does with what happens to him.

Aldous Huxley in "Texts and Pretexts", 1932


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