About building societies
Types of building societies and the services they can offer
A building society is a mutual organisation that:
- is owned by its members, and
- offers financial services to its members.
Funds are raised by the issue of shares to members who usually pay for them by subscription over time. The funds are used to provide financial services of a wide definition including, traditionally, mortgage advances for the purchase of house properties.
Types of building societies
A building society may be either a terminating society or a permanent society.
- Terminating societies terminate on a date fixed by their rules or when certain conditions are met.
- Permanent societies comprise all other building societies.
Why register a building society
In order to commence business, a building society must obtain a certificate of incorporation from the Registrar of Building Societies.
Its functions are to provide services of any kind for its members or other persons, including:
- lending money
- providing credit
- giving guarantees and indemnities
- dealing in financial transactions
- banking
- investments
- insurance
- trusteeships, and
- foreign exchange.
The Act gives building societies the necessary powers to carry out these functions, subject to compliance with all relevant legislation.
Commonly asked question
Can a person become a member of a building society after incorporation?
Yes. A member includes any person who for the time being holds a share in the society or who succeeds to any of the rights or liabilities of a member. The rules of a society may allow a person to become a member without holding a share in the society.