Plain language law

New Zealand law explained for everyone

Building Societies Act 1965

Constitution of building societies - Establishment and incorporation of societies

13: Mode of establishing society

You could also call this:

“How to start a building society in New Zealand”

If you want to start a building society in New Zealand, you need at least 20 people to agree on rules for how the society will work. These rules must follow the Building Societies Act. You then send these rules to the Registrar for registration, signed by at least 20 people and the society’s secretary or another officer.

To register, your society must have a director who lives in New Zealand or in a country that can enforce New Zealand’s laws. The first 20 members must usually live in New Zealand, and the society’s main office must be in New Zealand. If your society isn’t a registered bank, it needs to offer debt securities to the public and be in the business of borrowing and lending money.

Your society must always have a director living in the right place and keep its main office in New Zealand. If your society doesn’t offer debt securities or isn’t in the lending business when it registers, it has 12 months to start doing these things. If it doesn’t, the Registrar will cancel the society’s registration.

Some special terms in this law include ‘debt security’, ‘NBDT’, and ‘NBDT regulated offer’, which all relate to financial products and services. The law also explains what it means to be ‘ordinarily resident in New Zealand’, which is about where you usually live.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM371384.

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Part 2 Constitution of building societies
Establishment and incorporation of societies

13Mode of establishing society

  1. Any 20 or more persons may establish a society under this Act by—

  2. agreeing upon rules for the government of the society, being rules that conform to the requirements of this Act relating to rules of building societies; and
    1. sending to the Registrar for registration a copy of those rules, signed by not less than 20 of those persons and by the intended secretary or other officer.

      1. Subject to subsection (4) and section 13A, the Registrar must not register a copy of the rules or send the building society a certificate of incorporation unless—

      2. the society has a director who lives in—
        1. New Zealand; or
          1. an enforcement country (within the meaning of section 2(1) of the Companies Act 1993) and is a director or officer of a body corporate that is incorporated in an enforcement country; and
          2. the first 20 individuals who became members of the society are ordinarily resident in New Zealand; and
            1. the society's principal place of business is in New Zealand; and
              1. if the society is not also a registered bank, the society—
                1. has an open NBDT regulated offer of debt securities; and
                  1. carries on the business of borrowing and lending at all times after its rules are registered under this Act.

                  2. Subject to section 13A, the building society must ensure that at all times it meets the requirements of subsection (2)(a) and (c).

                  3. Despite subsection (2)(d), a society may be registered under subsection (2) even if it does not comply with paragraph (d).

                  4. However, the society must, within 12 months of its registration, comply with subsection (2)(d) and continue to comply with it thereafter.

                  5. If the society fails to comply with subsection (5) within the 12-month period, the Registrar must—

                  6. deregister the rules of the society; and
                    1. cancel the registration of the society under section 124.

                      1. In this section,—

                        debt security has the same meaning as in section 4(1) of the Non-bank Deposit Takers Act 2013

                          NBDT has the same meaning as in section 4(1) of the Non-bank Deposit Takers Act 2013

                            NBDT regulated offer has the same meaning as in section 4(1) of the Non-bank Deposit Takers Act 2013

                              ordinarily resident in New Zealand, in relation to an individual, means—

                              1. the individual has their home in New Zealand; or
                                1. New Zealand is their place of permanent abode even though they are temporarily absent from New Zealand.

                                Compare
                                • 1908 No 18 ss 7, 13
                                • 1955 No 97 s 5(a)
                                • Building Societies Act 1962 s 1(3) (UK)
                                Notes
                                • Section 13(1)(b): amended, on , by section 7 of the Building Societies Amendment Act 2007 (2007 No 43).
                                • Section 13(2): inserted, on , by section 26 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
                                • Section 13(3): inserted, on , by section 26 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
                                • Section 13(4): inserted, on , by section 26 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
                                • Section 13(5): inserted, on , by section 26 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
                                • Section 13(6): inserted, on , by section 26 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
                                • Section 13(7): inserted, on , by section 26 of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).