Building societies

A building society is incorporated under the Building Societies Act 1965 (the Act).  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 established under the Building Societies Act 1965 may be either a terminating society or a permanent society.

• A terminating society is a society which by its rules is to terminate at a fixed date or when certain conditions are met.
• A permanent society is all other building societies that are not a terminating society.

Few building societies exist today following widespread mergers in the late 1970's and subsequent conversion to banks.

FAQs

Why register a building society?

A building society is a mutual organisation (owned by its members) that offers financial services to its members.  In order to be incorporated as a building society and to carry on the business of a building society, the society must be registered by the Registrar of Building Societies.

Incorporation information

1. Who may apply?

A building society may be established with a minimum of 20 members.

2. What must be filed?

• A copy of the rules signed by not fewer than 20 members and the intended secretary or other officer (that meet the detailed requirements of the Building Societies Act 1965).
• The foundation share requirement must also be met.  This means that 20 members must be issued shares of at least $NZ1,000 each.  Issued foundation shares must exceed $NZ200,000 in total and members must have paid in full for those shares.

3. What fees are involved?

There is no filing fee to incorporate a building society.

How long does it take to incorporate a building society?

A new building society will normally be incorporated within 24 hours of receipt by the Companies Office.

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Filing obligations after incorporation 

The main documents that building societies are required to file are:

• annual returns - within three months of the start of the financial year (from 1 April in all cases)
• annual financial statements if an issuer, in accordance with the Financial Reporting Act 1993 (FRA).  If not an issuer in accordance with the FRA, at least 14 days before AGM, which must be held in four months from end of the financial year.
• alterations to rules which must be approved by a special resolution of members
• changes of directors/management
• change of registered office.

There is no cost to file the documents other than those prescribed by the FRA and Securities Act 1978.

Does a building society need to file financial statements with the Registrar of Building Societies under the Financial Reporting Act 1993?

If the building society is an ‘issuer’ it must file financial statements with the Registrar of Building Societies under the Financial Reporting Act 1993.

What is an issuer?

An entity that issues shares to the public.

If a building society is an issuer, is it required to file two sets of financial statements - one set under the Financial Reporting Act 1993 and another the Building Societies Act 1965?

Yes.  All building societies are required to file financial statements with the Registrar of Building Societies under the Building Societies Act.  In addition to this, if the society is an issuer then it must also file a second set of the same financial statements, with the relevant fee, under the Financial Reporting Act 1993.

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Our society was an issuer but is no longer one.  Do we still have to file financial statements under the Financial Reporting Act 1993?

No, the society reverts to ‘non-issuer status’ and therefore needs to file annual accounts only with the Registrar of Building Societies.  The society needs to confirm, in writing, to the Companies Office that it is no longer an issuer so no further reminders are sent.

Does a building society submit the same set of financial statements under the Financial Reporting Act 1993 and the Building Societies Act 1965? 

Yes, the same set can be filed twice.  A fee is required when filing under the Financial Reporting Act 1993.

Where are the documents sent?

The documents must be sent to:

The Companies Office
Northern Business Centre
Private Bag 92061
Victoria Street West
Auckland 1142

Can the annual return filing month be changed from the 1st of April?

No.  All current building societies have a 31 March balance date which is why the three month deadline for filing statements starts from 1 April.  The Building Societies Act 1965 does not allow for the this date to be changed.

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Is there an annual return form?

There is no printed annual return form available.  However the format of the annual return is in Schedule 5 of the Building Societies Act 1965 Regulations.  Specifically, the annual return should include:

• name of society, annual return year, registered office and details of directors, secretary and manager
• summary of fixed capital shares
• list of present fixed capital shareholders
• list of persons ceasing to be fixed capital shareholders
• bonus ballots
• loans made during the year concerning officers.

Is there a specific format under the Building Societies Act 1965 for financial statements?

If the building society is an issuer then it must follow the requirement of the Financial Reporting Act 1993.  If they are not an issuer there is no specific format prescribed, however section 91 of the Building Societies Act 1965 does set out what financial statements need to be prepared.  Specifically:

• a revenue and appropriation account
• a balance sheet as at the end of the financial year
• a statement of cash flows for that financial year
• such other financial statements prescribed in the regulations.
  

Also refer to section 93 of the Building Societies Act 1965 for form and content.

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Is there a form for the alteration to rules?

The form is specified in Schedule 1 of the Building Societies Act 1965 Regulations - Form 2.  There is no printed form available.

Is there a change of directors’ form?

No.

Who is the Registrar of Building Societies?

The Registrar of Companies is the Registrar of Building Societies.

How do we advise the Registrar that our details have changed?

Write to:

Registrar of Building Societies
Northern Business Centre
Private Bag 92061
Victoria Street West
Auckland 1142

Can a person become a member of a building society after incorporation?

Yes.  A person who invests or borrows money from a Building Society is considered to be a member of the society.

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If, at any particular time, the building society has no outstanding loans/mortgages etc, does that exempt it from filing?

No.
 

Removing a building society from the register

Building societies are removed:

• by liquidation under the Building Societies Act 1965 (the liquidation provisions of the Companies Act 1993 then apply)
• by the union of two or more societies under the Building Societies Act 1965
• when the society is dissolved in accordance with its rules and with the Building Societies Act 1965.

 
Such requests are actioned by the Registrar of Building Societies.