Incorporated Societies Act 2022

If you need more information about this Act, please contact the administering agency: Ministry of Business, Innovation, and Employment
216 Rules 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:

(a)

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):

(b)

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):

(i)

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

(ii)

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):

(c)

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:

(d)

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—

(i)

subsection (2) applies; and

(ii)

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—

(a)

the assets cannot reasonably be disposed of under subsection (1)(a) or (b); or

(b)

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

(c)

the circumstances prescribed in the regulations exist.

(3)

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.