An industrial and provident society usually consists of the owners of small businesses who, while continuing to operate independently, become part of this larger entity for mutual benefit.
An industrial and provident society may be established under the Industrial and Provident Societies Act 1908 (the Act) on application to the Registrar of Industrial and Provident Societies by 7 members and the secretary for carrying on any industry, business or trade authorised by its rules (except banking). The primary purpose of the society should not be for the profit of its members.
An industrial and provident society will usually consist of the owners of small businesses who, while continuing to operate independently, become part of this larger entity for mutual benefit. They work (industrial) and receive benefits (provident) from the society for their future well-being.
A co-operative taxi society is a good example with independent operators benefiting from car insurance schemes and a radio booking system. Societies are identifiable by having names ending in "Society Limited", sometimes "Co-operative Society Limited", and operate according to registered rules.
Registration creates a body corporate with perpetual succession (that is, indefinite existence) and with the ability to hold property and sue and be sued in its registered name. This status is unaffected by changes over time in its membership.
The members of an industrial and provident are not liable for its debts, contracts or other obligations.
Membership is regulated by registered rules which bind all present and future members and can be amended by resolution that takes effect on registration with the Registrar of Industrial and Provident Societies. No member has a personal right to any of the assets of an industrial and provident society.
Participation is generally evidenced by shares that are issued to members or, if the registered rules provide, may be transferred.
The committee of an industrial and provident society, on its incorporation, will adopt a common seal to evidence its commitment to external dealings. This is to be applied and its application witnessed as the registered rules provide. It can also lease, buy and sell property, borrow money and enter contracts in its own name, generally under its common seal.
By restricting the degree of participation by any one member to a value fixed by the Act, domination by one member is not possible. This ensures the co-operative nature of industrial and provident societies continues. That value is presently set at $4,000, though the Minister of the Crown with responsibility for the Act (currently the Minister of Commerce) may authorise a higher value in respect of any particular society by notice in the New Zealand Gazette (official journal).
The rules for succession to the interest up to the value of $1,000 of a deceased member aged at least 16 in an industrial and provident society are simplified by not requiring a grant of probate. A member can nominate a person to succeed to his or her shares, but if this is not done, the committee of the industrial and provident society can resolve to transfer the shares to the person entitled by law to receive them.