Building Societies Act 1965

Constitution of building societies - Functions and general powers of building societies

10: Permanent and terminating societies

You could also call this:

"Two types of building societies: ongoing and time-limited"

When you create a building society under this law, you can choose between two types: permanent or terminating.

A permanent society doesn't have a set end date. It keeps going indefinitely.

A terminating society, on the other hand, has a planned ending. This could be on a specific date, or when something particular happens that's written in its rules. It might also end when certain groups of shares finish after a set time or when they reach a goal.

Since 1 April 1981, building societies are not allowed to create new groups of shares that end after a certain time or when they reach a specific goal.

Also, from that same date, you can't start a new terminating society under this law. Only permanent societies can be created now.

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This page was last updated on 15 April 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM371378.

Topics:

Money and consumer rights > Banking and loansHousing and property > Buying and selling homes

9F: Effect of fraud, or

"Dealing with a building society is safe, even if someone has been dishonest"

11: Power to raise and repay funds, or

"Building societies can get and give back money using shares"

Part 2Constitution of building societies
Functions and general powers of building societies

10Permanent and terminating societies

A building society established under this Act may be either a permanent society or a terminating society.
A permanent society is a society that is not a terminating society.
A terminating society is a society—
which by its rules is to terminate—
1. at a fixed date; or
2. when a result specified in its rules is attained; or
which has included in its capital any subscriptions paid in respect of groups of shares which are to terminate at the end of given periods or on the attainment of specified results.

No society shall, on or after 1 April 1981, issue or re-issue any shares in groups which are to terminate at the end of given periods or on the attainment of specified results.
Notwithstanding subsection (1), no terminating society shall be first registered under this Act on or after 1 April 1981.

Notes

Section 10: replaced, on 22 December 1980, by section 3 of the Building Societies Amendment Act 1980 (1980 No 92).