Building societies

A building society is incorporated under the Building Societies Act 1965.

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?

A building society is a mutual organisation (owned by its members) that offers financial services to its members.  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 Building Societies Act 1965 gives building societies the necessary powers to carry out these functions, subject to compliance with all relevant legislation.

Further information