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Building Societies Act 1965

Constitution of building societies - Rules of society

17: Contents of rules

You could also call this:

“Rules tell you what a building society must do and how it works”

The rules of a society must include the following information:

You need to state the society’s name and office address. You also have to explain how the society will raise money.

You have to describe the types of shares the society will issue, how people can buy them, and if they can give them back.

If the society will end at a certain time, you need to say when that is. You also need to explain what happens to any leftover money or debts when it ends.

You need to say if the society will offer special shares, and if so, how many.

You have to explain how you will choose who gets loans or investments, and what the rules are for taking or giving up these opportunities.

The rules must say how the society will handle any losses.

You need to list any limits on what the society can do, including limits on borrowing, lending, or investing money.

The rules must explain how people can stop being members, how to pay auditors, and how to choose and pay directors and other leaders.

You need to say what the directors and other leaders are allowed to do and what their responsibilities are.

You have to explain how the society will keep important documents safe.

The rules need to say how to solve disagreements between the society and its members.

You have to list any fines for members who break the rules and explain how the society will record these fines.

The rules must explain how to use and keep safe the society’s official seal.

You need to say how the society can be closed down.

If the society offers bonus balloting shares, you need to explain how these bonus draws will work.

The rules also need to explain how to call and run meetings, including how members can ask for meetings, how to tell people about decisions to be made, how meetings should work, how to let people know about meetings, and how voting will happen.

New societies must also allow for fully paid shares.

The society can include examples of important documents in its rules.

Societies can’t offer loans or investments by auction or ballot, except for bonus ballots.

Societies can issue any shares that follow the law, even if their rules don’t specifically allow it. But they need to tell the Registrar about these shares and update their rules by 31 March 1982.

Societies can’t take away a member’s share payments or charge fines for late payments on shares.

These rules don’t change any other parts of the law that say certain rules are not allowed.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM371389.

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Part 2 Constitution of building societies
Rules of society

17Contents of rules

  1. The rules of every society shall set out—

  2. the name of the society and the address of its registered office:
    1. the manner in which the funds of the society are to be raised:
      1. the classes of shares to be issued, the terms on which they are to be issued, the terms (if any) on which they may be withdrawn or surrendered, and the manner in which payments for shares are to be made and contributions are to be paid to the society by the members:
        1. in the case of a terminating society, the date on which, or the result on the attainment of which, the society is to terminate; or, where the terminating society is one in which groups of shares are to terminate at the end of given periods or on the attainment of specified results, that period or result in respect of any group, and the manner in which, on the termination of any group, the residual assets or liabilities are to be dealt with by the society:
          1. whether preferential shares are to be issued and, if so, within what limits:
                1. the manner in which any ballots, tenders, or auctions for loans or other investments in terminating groups are to be conducted, and the terms and conditions upon and subject to which rights to take up such loans or other investments may be exercised or surrendered:
                  1. the manner in which losses are to be ascertained and provided for:
                        1. any restrictions or prohibitions on the functions of the society:
                          1. any restrictions or prohibitions on any powers, rights, or authorities that a society has under this Act:
                            1. any restrictions on the power of the society to borrow money:
                              1. any restrictions on the power of the society to lend money:
                                1. any restrictions on the power of the society to invest money:
                                  1. the manner in which membership is to cease:
                                    1. the manner of remunerating auditors, and the manner of appointing, remunerating, and removing the board of directors and other officers:
                                      1. the powers and duties of the board of directors and of other officers:
                                        1. provision for the custody of the mortgage instruments and other securities belonging to the society:
                                          1. whether disputes between the society and any of its members, or any person claiming by or through a member, or under the rules, are (subject to the provisions of this Act) to be settled by reference to the court or to arbitration:
                                            1. the fines and forfeitures to be imposed on members of the society, and the manner of their disposal in the society's accounts:
                                              1. provision for the device, custody, and use of the society's common seal:
                                                1. the manner in which the society (whether permanent or terminating) may be terminated or dissolved:
                                                  1. in the case of a society which proposes to issue bonus balloting shares, the manner in which bonus ballots are to be conducted.

                                                    1. The rules of every society shall also provide for the calling and holding of meetings, and in particular for—

                                                    2. the right of members to requisition meetings:
                                                      1. the manner in which notice of any resolutions to be moved at meetings is to be given to members:
                                                        1. the procedure to be observed at meetings:
                                                          1. the form of notice for the convening of a meeting, and the manner of its service:
                                                            1. the voting rights of members, the right to demand a poll, and the manner in which a poll is to be taken.

                                                              1. In the case of a society incorporated after the commencement of this Act, the rules shall also include provision authorising the issue of paid up shares in accordance with subsection (1) of section 29.

                                                              2. The rules of any society may describe in a schedule thereto the forms of mortgage, transfer, agreement, bond, security for deposit or loan, or other instrument necessary for carrying its purposes into execution.

                                                              3. No society may in its rules provide, in respect of any shares issued by it on or after 1 April 1981, a right to a loan or other investment by tender, auction, or ballot except by way of a bonus ballot.

                                                              4. The rules of every society shall be deemed to authorise the society to issue any shares not inconsistent with the provisions of this Act: provided that any society that does issue shares not expressly authorised by its rules shall—

                                                              5. before issuing the shares, give to the Registrar a statement in writing setting out the terms on which the shares are to be issued and on which they may be withdrawn:
                                                                1. before 31 March 1982, amend its rules pursuant to section 19 to expressly authorise the issue of shares not inconsistent with the provisions of this Act.

                                                                  1. Notwithstanding anything to the contrary in a society's rules, no society shall, on or after 1 April 1981, issue shares on terms which give the society any right—

                                                                  2. to regard any share subscription paid by a member as forfeit:
                                                                    1. to impose any fine or arrears fee upon any member in respect of those shares.

                                                                        1. Repealed

                                                                        2. Repealed

                                                                        3. The foregoing provisions of this section shall have effect without prejudice to the provisions of this Act relating to rules that are void as therein mentioned.

                                                                        Compare
                                                                        • 1908 No 18 ss 11, 21
                                                                        • Building Societies Act 1962 ss 4, 130, Eighth Schedule (para 3) (UK)
                                                                        Notes
                                                                        • Section 17(1)(f): repealed, on , by section 6(1) of the Building Societies Amendment Act 1987 (1987 No 175).
                                                                        • Section 17(1)(g): repealed, on , by section 6(1) of the Building Societies Amendment Act 1987 (1987 No 175).
                                                                        • Section 17(1)(h): amended, on , by section 38 of the Building Societies Amendment Act 1987 (1987 No 175).
                                                                        • Section 17(1)(h): amended, on , by section 4(1) of the Building Societies Amendment Act 1980 (1980 No 92).
                                                                        • Section 17(1)(j): repealed, on , by section 6(2) of the Building Societies Amendment Act 1987 (1987 No 175).
                                                                        • Section 17(1)(k): repealed, on , by section 6(2) of the Building Societies Amendment Act 1987 (1987 No 175).
                                                                        • Section 17(1)(ka): inserted, on , by section 6(2) of the Building Societies Amendment Act 1987 (1987 No 175).
                                                                        • Section 17(1)(kb): inserted, on , by section 6(2) of the Building Societies Amendment Act 1987 (1987 No 175).
                                                                        • Section 17(1)(kc): inserted, on , by section 6(2) of the Building Societies Amendment Act 1987 (1987 No 175).
                                                                        • Section 17(1)(kd): inserted, on , by section 6(2) of the Building Societies Amendment Act 1987 (1987 No 175).
                                                                        • Section 17(1)(ke): inserted, on , by section 6(2) of the Building Societies Amendment Act 1987 (1987 No 175).
                                                                        • Section 17(1)(p): amended, on , by section 8(2)(a) of the Building Societies Amendment Act 1970 (1970 No 117).
                                                                        • Section 17(1)(t): inserted, on , by section 4(2) of the Building Societies Amendment Act 1980 (1980 No 92).
                                                                        • Section 17(5): replaced, on , by section 4(3) of the Building Societies Amendment Act 1980 (1980 No 92).
                                                                        • Section 17(5): amended, on , by section 38 of the Building Societies Amendment Act 1987 (1987 No 175).
                                                                        • Section 17(5A): inserted, on , by section 4(3) of the Building Societies Amendment Act 1980 (1980 No 92).
                                                                        • Section 17(5B): inserted, on , by section 4(3) of the Building Societies Amendment Act 1980 (1980 No 92).
                                                                        • Section 17(5B)(c): repealed, on , by section 6(3) of the Building Societies Amendment Act 1987 (1987 No 175).
                                                                        • Section 17(6): repealed, on , by section 4(4) of the Building Societies Amendment Act 1980 (1980 No 92).
                                                                        • Section 17(7): repealed, on , by section 4(4) of the Building Societies Amendment Act 1980 (1980 No 92).