Thousands of community clubs yet to comply with new incorporated societies legislation

Around 18,000 incorporated societies across New Zealand - ranging from tennis clubs to gardening groups - are yet to re-register under new legislation, prompting warnings that thousands of clubs will simply fold.

Societies registered under the old Act have until 5 April 2026 to comply with the new Incorporated Societies Act 2022, or face involuntary dissolution, which exposes members to personal risk and limits a club's ability to raise funds and enter into contracts.

Less than a quarter of the approximately 24,000 societies registered under the Incorporated Societies Act 1908 have met new regulatory obligations since they were enacted in October 2023.

Information received by Wellington law firm Moran Law from the Companies Office, shows 78 percent of incorporated societies are still yet to comply with the new legislation.

Organisations who represent the interests of small volunteer-led community groups say it highlights the fact that most do not have the resources to deal with the change.

The New Zealand Amateur Sport Association (NZASA) said thousands of community-based organisations were under threat.

Chairman Gordon Noble-Campbell said small clubs contributed to the social fabric of New Zealand.

"The potential loss of these organisations would have a profound effect on the physical, social, and mental well-being of all New Zealanders," Noble-Campbell said.

ACT Party MP Laura McClure, who introduced a private members' bill to address some of the concerns in the sector, is urgently seeking a meeting with the relevant minister.

"It may actually be the end of some of these organisations and I'm hearing that from on the ground that there are some people that are not re-registering or they are just folding up altogether. As we get closer to the deadline everybody will see what kind of issue this actually is.

"These clubs play an important role in our communities and I think it's extremely important that we maintain that," McClure said.

Before re-registering, clubs have to rewrite their constitutions and include additional procedures like dispute resolution processes and submit it with the Registrar of Incorporated Societies.

The Registrar will reject it if it is non-compliant and clubs will have to start over again.

Around 7000 of the total incorporated societies are community sport organisations and Companies Office data shows their rate of re-registration is even lower at just 18 percent.

Noble-Campbell said sports clubs were already struggling.

From the start of 2022 to 31 March 2025, over 1100 incorporated community sport organisations were dissolved by the Registrar of Incorporated Societies.

The 2024 National Sport Club survey found that the average number of sport club volunteers had dropped by 45 percent since 2019. It also found that the proportion of clubs reporting they were losing money had nearly doubled in those five years.

Noble-Campbell said the new legislation would make recruiting volunteers to run clubs even harder.

With over 5000 community sport organisations still to re-register, Noble-Campbell said many of them would not even be aware of the changes.

"And if they are aware they are not necessarily sure what it is they need to do and in some cases they are just making the decision to carry on regardless and to hell with the consequences of no longer being an incorporated entity."

Politicians urged to act before it's too late

The NZ Amateur Sport Association has been lobbying parliament about the impact of the legislation on grass roots sport clubs since it was first introduced under the previous Labour government.

The association has recommended a number of amendments be made to the Act through its submissions to parliament.

In December last year, McClure introduced the Incorporated Societies (Small Societies) Amendment Bill, which aims to carve out a place within the new legislation for small societies to make it fit for purpose.

"The act needed to be updated, there needs to be some checks and balances, and robust procedures in place but this legislation has the big end of incorporated societies in mind like New Zealand Rugby for example and has really forgotten about our small societies," McClure said.

She said the new Act was too onerous on small clubs.

"The directors liabilities that are going to be imposed on people that are part of these committees for example, is basically like putting commercial laws on top of people who are essentially volunteering and giving up their time and that could put some people at quite a lot of risk and put them off joining these committees."

McClure said some clubs are also having to spend money to comply with the change.

"Quite a lot of these clubs have had to go get lawyers involved in re-writing their constitutions and there will be ongoing costs for some of them like having to pay auditors."

The Ministry of Business, Innovation, and Employment (MBIE) is responsible for the Register of Incorporated Societies.

McClure has asked for a meeting with Scott Simpson, the Minister of Commerce and Consumer Affairs. She wants to see him push the deadline out and adopt some of the changes in her bill.

Community Networks Aotearoa (CNA) is an umbrella organisation for local community networks, including not-for-profit and voluntary social service organisations all over the country.

The chair, Holly Snape, said the old Act needed updating but did not think the sector was well communicated with throughout the legislation process.

Snape, who is also the chief executive at Community Waikato, works with a broad range of incorporated societies.

"We are still finding in conversations that many of them have no idea that this is even a requirement so we are a bit concerned about the way the communications have rolled out across the sector," Snape said.

Under the new rules committee members have to disclose any potential conflicts of interest but Snape said in some communities that could be difficult to avoid.

"Particularly in those isolated rural areas where one person is kind of doing everything. You can imagine a committee member might also have a painting business for example and you might need to get your club re-painted but now there's going to be a rigmarole around declaring your interests and you have to get quotes from other companies."

Snape said another concern were changes to financial reporting standards, which will see more clubs have to get audits over a certain threshold of assets.

"I'm involved for example in a dog obedience club, it would be lucky to have $20,000 go through the books annually but 50 years ago was able to buy a pretty old ratty set of club rooms that now because of where it's located could be worth quite a lot of money."

Noble-Campbell said trying to get through to politicians had been frustrating, despite the evidence that the reform would be detrimental to small clubs.

"It's extraordinary, I don't understand it because it's staring everyone in the face. You only have to look at the data and talk to the people in community sport and it's all there in front of you. I think there is a kind of a reluctance for them to say that they might have got it wrong," he said.

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