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Incorporated Societies Act 2022

Administration of societies - Financial gain

23: Financial gain

You could also call this:

"When a society helps its members gain money or benefits"

Illustration for Incorporated Societies Act 2022

You are part of a society that must follow rules. If your society gives money or other benefits to its members, it is treated as being done for financial gain. This also applies if your society has shares or property that its members can use for personal benefit. You are considered to be working for financial gain if your society does any of these things. This means your society must act in a certain way to follow the rules. Your society's actions are important to understand how it works. There is another section that affects this rule, which is section 24. This section is important to consider when thinking about financial gain. It helps clarify how the rules work for your society.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS100887.

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22: Society must not be carried on for financial gain of its members, or

"Societies can't be run to make money for their members."

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24: When society does not have financial gain purpose, or

"What happens when a society isn't set up to make money for its members?"

Part 3Administration of societies
Financial gain

23Financial gain

  1. A society (or proposed society) must be treated as having a purpose of being carried on for the financial gain of any of its members if—

  2. it distributes, or may distribute, any gain, profit, surplus, dividend, or other similar financial benefit to any of its members (whether in money or in kind); or
    1. it has, or may have, capital that is divided into shares or stock held by its members; or
      1. it holds, or may hold, property in which its members have a disposable interest (whether directly, or in the form of shares or stock in the capital of the society or otherwise).

        1. A society must be treated as being carried on for the financial gain of any of its members if it acts as referred to in any of paragraphs (a) to (c) of subsection (1).

        2. This section is subject to section 24.