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Incorporated Societies Act 2022

Administration of societies - Committee and officers - Conflict of interest disclosure rules

68: Avoidance of transactions

You could also call this:

"Stopping a deal if someone in charge benefits from it"

Illustration for Incorporated Societies Act 2022

You can stop a deal made by the society if an officer has an interest in it. You can do this within 3 months after the deal is notified under section 65(1). However, you cannot stop the deal if the society gets a fair price for it, as explained in section 69. You can only stop a deal because of an officer’s interest if you follow this rule. A society’s rules cannot override this law and allow a deal to be stopped in other circumstances. If a society’s rules try to do this, those rules are not valid. If you want to know more about similar laws, you can look at the 1993 No 105 s 141(1), (2), (6) law.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS100945.

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Topics:
Money and consumer rights > Consumer protectionBusiness > Industry rulesBusiness > Fair trading
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67: Constitution may negate, limit, or modify conflict of interest requirements, or

"Your society's rules can change or cancel some conflict of interest requirements."

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69: What is fair value, or

"What makes a fair deal for a society?"

Part 3Administration of societies
Committee and officers: Conflict of interest disclosure rules

68Avoidance of transactions

  1. A transaction entered into by the society in which an officer of the society is interested may be avoided by the society at any time before the expiry of 3 months after the transaction is notified under section 65(1).

  2. However, a transaction cannot be avoided if the society receives fair value under it (see section 69).

  3. A transaction in which an officer is interested can only be avoided on the ground of the officer’s interest in accordance with this section.

  4. A provision of a constitution is of no effect to the extent that it purports to allow a transaction to be avoided in circumstances in which the transaction could not otherwise be avoided under this Act.

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