Allow certain modifications to constitutions or rules

In May 2020, the Government passed temporary legislation to support entities to operate effectively through COVID-19

The COVID-19 Response (Requirements For Entities—Modifications and Exemptions) Act 2020 allows entities to make certain modifications to their constitutions or rules.

An entity may modify certain provisions in its rules if a majority of its governing officers believe in good faith that it is not reasonably practicable to comply with those provisions as a result of COVID-19.

Section 14 of the Act outlines the provisions that may be modified, namely —

  1. calling or holding meetings, including for the purpose of establishing a quorum
  2. a method or form of voting
  3. giving or receiving information
  4. making or keeping new records
  5. a method or form of dispute resolution
  6. a method or form of disciplinary procedure
  7. a waiver, suspension, deferral, or reduction of fees or other amounts payable by members of the entity to the entity
  8. a deferral of auditing, assurance, or financial reporting or review requirements
  9. use of electronic means to do any matter listed in section 10(2) of the legislation
  10. other procedural or administrative process, or any other matters prescribed in regulations made under the Act.

Section 15 of the Act outlines which provisions may not be modified, namely —

  1. the purpose or objects of the entity
  2. the powers of the entity (other than a procedural or administrative
    power)
  3. the sale, transfer, or other disposition of real or personal property
  4. voting rights or rights to a dividend or other distribution
  5. the duties of the governing body or governing officers (other than a procedural or an administrative duty)
  6. fees or other payments (other than a waiver, suspension, deferral, or reduction of fees or other amounts payable by members of the entity to the entity)
  7. any matter if the modification to that matter has a material detrimental effect (direct or indirect) on the substantive rights or powers of any creditor or other person
  8. any matter that is prescribed by regulations
  9. the number or need for a quorum
  10. rights of access to courts, tribunals or arbrital tribunals
  11. any alteration or addition to the constitution or rules made by order of a court
  12. any other matter that is not listed above.

Which entities may modify their rules under these provisions

The provisions apply to:

  • building societies
  • charitable trust boards
  • companies
  • credit unions
  • firms
  • friendly societies
  • incorporated societies
  • industrial and provident societies
  • limited partnerships.

The provisions also apply to the following Māori governance entities:

  • assembled owners (under Te Ture Whenua Māori Act)
  • a mandated iwi organisation (under the Māori Fisheries Act)
  • a Māori Association (under the Māori Community Development Act)
  • a Māori land trust
  • a Māori incorporation
  • a body corporate or the trustees of a trust appointed to administer a Māori reservation, and
  • a Māori Trust Board.

These provisions also apply to post-settlement governance entities.

These provisions will be in force until 31 March 2021

The modification provisions have retrospective effect from 21 March 2020 when New Zealand moved to Level 2 of the COVID-19 alert system. Originally these provisions were set to expire at the end of November 2020, they have been extended by an Order in Council and now apply until 31 March 2021.

Who oversees the provisions

For the modification provisions, the relevant authorities are the responsible Registrar or agency.

For all entities other than the Māori governance entities, the responsible Registrar is the Registrar who acts under the legislation under which the entity is registered or incorporated.

For the Māori governance entities:

  • The responsible Registrars or agencies for the purposes of the electronic means and modification provisions are:
    • The Chief Registrar of the Māori Land Court for entities under the Te Ture Whenua Māori Act
    • Te Puni Kōkiri for Māori Associations and Māori Trust Boards
    • Te Ohu Kaimoana for mandated iwi organisations
  • The responsible Registrars or Ministers for the purposes of the exemption provisions are:
    • The Minister for Māori Development (for entities under the Te Ture Whenua Māori Act, the Māori Community Development Act and the Māori Trust Boards Act)
    • The Minister for Fisheries (for entities under the Māori Fisheries Act)
  • The Chief Judge of the Māori Land Court is also empowered to grant relief to entities under the Te Ture Whenua Māori Act in relation to provisions that are usually set by the Court (e.g. terms of trust deeds).
  • An entity may have more than one responsible Registrar if, for example, they are also an incorporated society.

An entity’s obligations when using these provisions

When using the modification provisions, an entity must:

  • keep a record of their use and the reasons why (decided by a majority of governance officers)
  • as soon as is practicable after their use, make reasonable efforts to notify members of the matter
  • notify the responsible Registrar or agency (or Registrars if there is more than one for a particular entity) — this does not apply to a firm or post-settlement governance entity.

How to give notice to the Registrar

  1. Download the Notice of modification to constitution or rules
  2. Complete the notice. Take care to read the notes on Page 2 of the form.
  3. Attach a copy of the written record required by section 18(1)(a) of the Act and a certificate by a governing officer of the entity certifying that, in making the modification, all requirements of Part 2 of the Act were complied with.

Send your completed notice to us by email to covidnotices@mbie.govt.nz

What happens next?

When the responsible Registrar or agency receives a notification, they will make the information publicly available on the relevant register, and in any other way they see fit.

Last updated 30 November 2020