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Incorporated Societies Act 2022

Removal from register, amalgamation, liquidation, and other processes - Other matters relating to removal or liquidation of society

216: Rules for disposal of surplus assets

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"How to give away leftover assets to charity when a society closes down"

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You must take reasonable steps to dispose of surplus assets to not-for-profit entities. The assets must be distributed to the entity nominated in the society's constitution under section 26(1)(l), unless more than one entity has been nominated. If more than one entity has been nominated, the assets must be distributed in the manner provided by the society's constitution or in the manner specified in a resolution approved under subpart 6. You must distribute the assets as the Registrar directs if the Registrar is satisfied that certain conditions are met. This includes if the assets cannot reasonably be disposed of under the usual rules or if the society or a person requests the Registrar to act. The Registrar will consider the matters provided for in the society's constitution under section 26(1)(l) when directing the distribution of assets. If an entity nominated in the society's constitution is not a not-for-profit entity or is unable to receive the surplus assets, that entity must be disregarded. You must follow these rules when disposing of surplus assets. The rules are subject to certain conditions and requirements, including section 218 and subpart 6.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS101110.

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Part 5Removal from register, amalgamation, liquidation, and other processes
Other matters relating to removal or liquidation of society

216Rules for disposal of surplus assets

  1. The relevant person must take reasonable steps to ensure that the surplus assets of the society after the payment of all costs, debts, and liabilities are disposed of to 1 or more not-for-profit entities in accordance with the following rules:

  2. the assets must be distributed to the entity nominated in the society’s constitution under section 26(1)(l) unless more than 1 not-for-profit entity has been nominated by name, class, or description (subject to section 218):
    1. if more than 1 not-for-profit entity has been nominated by name, class, or description in the society’s constitution under section 26(1)(l), the assets must be distributed to those not-for-profit entities in the following manner (subject to section 218):
      1. in the manner provided by the society’s constitution (unless that manner does not result in reasonable certainty about the allocation to each entity); or
        1. in the manner specified in a resolution approved under subpart 6 (if the society’s constitution does not result in reasonable certainty about the allocation to each entity):
        2. if a resolution has been approved under subpart 6 for the purposes of this paragraph, the assets must be distributed to 1 or more not-for-profit entities in the manner specified in that resolution:
          1. the assets must be distributed as the Registrar directs (after the Registrar has had regard to the matters provided for in the society’s constitution under section 26(1)(l)) if the Registrar is satisfied that—
            1. subsection (2) applies; and
              1. an effective resolution has not been approved under subpart 6 for the purposes of paragraph (c).

              2. This subsection applies if the Registrar is satisfied that—

              3. the assets cannot reasonably be disposed of under subsection (1)(a) or (b); or
                1. the society or a person of a class prescribed by the regulations requests in the manner prescribed by the regulations (if any) that the Registrar act under subsection (1)(d); or
                  1. the circumstances prescribed in the regulations exist.

                    1. If 1 or more entities that were nominated in the society’s constitution under section 26(1)(l) are not not-for-profit entities or for any reason are unable or unwilling to receive the surplus assets, those entities must be disregarded.