Friendly Societies Act 1971

Amalgamation of registered societies and transfers of their engagements

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• (1) The provisions of this section and of section 2 below shall have effect in place of the provisions of section 70 of the Friendly Societies Act 1896 (in this Act referred to as " the principal Act").

• (2) Any two or more registered societies may, by special resolution of each of them, become amalgamated together as one society, with or without any dissolution or division of the funds of those societies or any of them.

• (3) A registered society may, by special resolution, transfer its engagements to any other registered society which, by special resolution or in such other manner as may be authorised by its rules, undertakes to fulfil those engagements.

• (4) Before a registered friendly society becomes amalgamated with, or transfers its engagements to, another friendly society in pursuance of subsection (2) or subsection (3) above, or transfers its engagements to a company in accordance with section 71 of the principal Act, information relating to the terms of the proposed amalgamation or transfer shall be given to the members of the society—

• (a) by sending to each member of the society, not less than fourteen days before the date of the general meeting at which the resolution for the amalgamation or transfer is to be proposed, a notice in terms approved for the purpose by the chief registrar; or

• (b) if the chief registrar so allows in the case of all or any of the members of the society, by placing an advertisement, in terms approved for the purpose by him, in such newspaper or newspapers, and at such time or times, as he may specify.

• (5) Where, in accordance with section 75 of the principal Act, there is sent to the central office a copy of a special resolution passed at a meeting of a registered friendly society—

• (a) for the purpose referred to in subsection (2) or subsection (3) above, or

• (b) for the purpose of transferring the engagements of the friendly society to a company in accordance with section 71 of the principal Act,

the resolution shall not be registered (and accordingly shall not take effect) before the expiry of the period of six weeks beginning with the date on which it is received at the central office.

• (6) A registered society consisting wholly of members under twenty-one and a registered society or branch or branches of a society having members above twenty-one may, by resolutions registered in the manner required for the registration of an amendment of rules, become amalgamated together as one society or branch, or provide for distributing among several branches the members of a society consisting wholly of members under twenty-one; and the preceding provisions of this section shall not apply to such an amalgamation.

Objections to amalgamations and transfers of engagements of friendly societies

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• (1) Subject to subsection (2) below, where a special resolution has been passed for the amalgamation, or transfer of the engagements, of a registered friendly society—

• (a) any member of the society may by notice in writing complain to the chief registrar on the ground that the provisions of section 1 above, section 4 below or of the principal Act or of any rules of the society relating to the procedure for deciding on the resolution have not been complied with ; and

• (b) any person (whether a member of the society or not) who claims that he is one of a class of persons who to a substantial extent would be adversely affected by the amalgamation or transfer may by notice in writing complain to the chief registrar on that ground.

• (2) A complaint under this section may not be made after the expiry of the period of six weeks referred to in section 1(5) above, but where such a complaint is made the special resolution shall not be registered until the complaint is finally determined or is withdrawn.

• (3) Subsections (3) and (4) of section 68 of the principal Act (powers of chief registrar in dealing with disputes) and section 84(e) of that Act (penalties for failure to comply with requirements of chief registrar in dealing with disputes) shall apply in relation to a complaint made to the chief registrar under this section as they apply in relation to a dispute referred to him under that Act; and it is hereby declared that the Arbitration Act 1950 does not apply to proceedings on a complaint under this section.

• (4) Where a complaint is made under this section the chief registrar may either dismiss it or if, after giving the complainant and the registered society concerned an opportunity of being heard, he finds the complaint to be justified, may either—

• (a) so declare, but make no other declaration or order under this subsection on the complaint; or

• (b) declare the special resolution to be invalid; or

• (c) make such order as he thinks fit modifying the terms of the amalgamation or transfer and, where appropriate, specifying the steps which must be taken before the special resolution may be registered at the central office;

and it shall be the duty of the chief registrar to furnish a statement, either written or oral, of the reasons for any decision which he gives on a complaint under this section.

• (5) Where an order has been made under subsection (4)(c) above in relation to a proposed amalgamation or transfer of engagements, the central office shall not register a special resolution for giving effect to that amalgamation or transfer unless satisfied that any steps specified in the order have been taken.

• (6) Subject to subsections (7) and (8) below, the validity of a special resolution passed for either of the purposes referred to in subsection (1) above shall not be questioned in any legal proceedings whatsoever (except proceedings before the chief registrar under this section or arising out of any such proceedings) on any ground on which a complaint could be, or could have been, made to the chief registrar under this section.

• (7) In the course of proceedings on a complaint under this section the chief registrar may, if he thinks fit, at the request of the complainant or of the registered society concerned, state a case for the opinion of the High Court or, if the society concerned is registered in Scotland, the Court of Session on any question of law arising in the proceedings; and the decision of the High Court or, as the case may be, the Court of Session on a case stated under this subsection shall be final.

• (8) Without prejudice to subsection (1) above, where a special resolution has been passed for the amalgamation of a registered friendly society (whether or not the resolution has taken effect) any person, whether a member of the society or not, who—

• (a) claims to be entitled to receive any form of benefit from the society, and

• (b) is dissatisfied with the provision made for satisfying his claim,

may within the period of three months beginning with the day on which the special resolution is passed make an application to the county court, or in Scotland to the sheriff, for the district within which the chief or any other place of business of the society, or (if the amalgamation has taken effect) the amalgamated society, is situated, and on any such application the county court or sheriff shall have the same powers in the matter as in regard to the settlement of disputes under the principal Act.

Other amendments relating to amalgamation, conversion and dissolution of societies

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• (1) So much of section 71 of the principal Act as authorises the amalgamation of a registered society with a company shall cease to have effect.

• (2) Section 73 of the principal Act (which provides for the conversion of certain registered societies into branches of other registered societies) shall cease to be limited to societies first registered before 1876, and accordingly subsection (7) of that section shall cease to have effect.

• (3) In paragraph (b) of section 78(1) of the principal Act (which provides for the dissolution by consent of societies and branches other than friendly societies and branches of friendly societies) the words " as respects societies or branches other than friendly societies or branches " shall be omitted and after the word " dissolution " there shall be added the words " and, in the case of a branch of a friendly society, with the consent of the central body of the society or in accordance with the general rules of the society " ; and paragraph (c) of the said section 78(1) (which contains special provisions for the dissolution by consent of friendly societies and branches of friendly societies) shall cease to have effect.

• (4) For subsection (2) of the said section 78 there shall be substituted the following subsection:—

(2) If any member of a registered friendly society or branch in respect of which an instrument of dissolution has been registered in accordance with section 79 of this Act, or if any person claiming any relief, annuity or other benefit from the funds of such a society or branch, is dissatisfied with the provision made for satisfying his claim, he may within the period of three months referred to in subsection (6) of that section make an application to the county court for the district within which the chief or any other place of business of that society or branch is situated, and on any such application that court shall have the same powers in the matter as it has with regard to the settlement of disputes under this Act.

Special resolutions

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• (1) For the purposes of this Act and the principal Act a special resolution, in relation to a registered society, is a resolution passed—

• (a) at a general meeting of which notice, specifying the intention to propose that resolution, has been duly given in accordance with the society's rules, and

• (b) by not less than three-quarters of those members of the society for the time being entitled under the society's rules to vote who vote either in person or by proxy at the meeting or, in the case of a meeting of delegates appointed by members, by not less than three-quarters of the delegates who vote at the meeting.

• (2) Notwithstanding anything to the contrary in the rules of a registered society, at any such general meeting as is referred to in subsection (1)(a) above, other than a meeting of delegates, proxy voting shall be permitted on any resolution which, if passed as mentioned in subsection (1)(b) above, would be a special resolution, and the procedure adopted by a registered society for proxy voting on any such resolution shall comply with any requirements imposed by the chief registrar by regulations made under this section.

• (3) The provisions of this section shall have effect in place of the provisions of section 74 of the principal Act, but nothing in this Act shall affect the operation of the principal Act in relation to a special resolution, within the meaning of the said section 74, which is passed and confirmed in accordance with that section before the day appointed for the coming into force of this section.

Power of chief registrar to inspect and apply for winding up of registered friendly societies and branches

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• (1) If it appears to the chief registrar to be expedient to do so in the interests of the members of a registered friendly society or of the public he may appoint an inspector to examine into and report on the affairs of the society, and for that purpose the inspector may exercise in respect of the society all or any of the powers conferred by subsection (5) of section 76 of the principal Act on an inspector appointed under that section.

• (2) If on receiving the report of an inspector appointed by him under this section, it appears to the chief registrar that it is in the interests of the members of the society or of the public that the society should be wound up, then, unless the society is already being wound up by the court, the chief registrar may present a petition to the High Court or, in Scotland, to the Court of Session for the society to be wound up by the court in accordance with the Companies Act 1948 if the court thinks it just and equitable that this should be done.

• (3) The chief registrar may, if he considers it just, direct that all or any of the expenses of and incidental or preliminary to an inspection under this section shall be defrayed out of the funds of the society, or by the members or officers, or former members or officers, of the society in such proportions as he may direct.

• (4) The provisions of this section apply in relation to a registered branch of a registered friendly society as they apply in relation to such a society.

• (5) So much of section 17 of the Industrial Assurance Act 1923 as provides for the inspection and dissolution of collecting societies under that section shall cease to have effect (being superseded by the provisions of this section).

Power of chief registrar to suspend business of registered friendly societies and branches

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• (1) Subject to the following provisions of this section, if, with respect to any registered friendly society, the chief registrar considers it expedient to do so in the interests of the members of the society or the public, he may make an order forbidding the society to accept any new members or to enter into a new contract with any member of the society.

• (2) Not less than one month before making an order under subsection (1) above in relation to a society the chief registrar shall serve on the society a notice stating that he proposes to make such an order.

• (3) A notice under subsection (2) above shall specify the considerations which have led the chief registrar to conclude that it would be in the interests of the members of the society or of the public to make the order.

• (4) The chief registrar shall consider any representations with respect to a notice under subsection (2) above which may be made to him by the society within such period (not being less than one month) from the date on which the society is served with the notice as the chief registrar may allow and, if the society so requests, shall afford to it an opportunity of being heard by him within that period.

• (5) On making an order under subsection (1) above in relation to a society, the chief registrar shall serve on the society notice of the making of the order, specifying the considerations which have led him to conclude that it is expedient to make the order in the interests of the members of the society or of the public ; and the chief registrar may not make an order under subsection (1) above unless all the considerations so specified were those, or were among those, which were specified in the notice served on the society under subsection (2) above.

• (6) Notice of the making of an order under subsection (1) above shall be published by the chief registrar in the Gazette and in such other ways as appear to him expedient for informing the public.

• (7) If a society contravenes the provisions of an order under subsection (1) above it shall be liable on conviction on indictment or on summary conviction to a fine which, on summary conviction, shall not exceed £400; and every officer of the society who knowingly and wilfully authorises or permits the contravention shall be liable—

• (a) on conviction on indictment, to a fine or to imprisonment for a term not exceeding two years, or to both, or

• (b) on summary conviction, to a fine not exceeding £400.

• (8) An order under subsection (1) above may be revoked by a subsequent order made by the chief registrar.

• (9) The provisions of this section apply in relation to a registered branch of a registered friendly society as they apply in relation to such a society.

Power of chief registrar to require production of documents

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• (1) The chief registrar may at any time, if he thinks there is good reason to do so—

• (a) give directions to a registered friendly society requiring the society, at such time and place as may be specified in the directions, to produce such books or papers as may be so specified ; or

• (b) authorise an officer of the central office, on producing (if required to do so) evidence of his authority, to require a registered friendly society to produce to him forthwith any books or papers which the officer may specify.

• (2) Where by virtue of subsection (1) above the chief registrar or any officer of the central office has power to require the production of any books or papers from a registered friendly society, the chief registrar or officer shall have the like power to require production of those books or papers from any person who appears to the chief registrar or officer to be in possession of them; but where any such person claims a lien on books or papers produced by him, the production shall be without prejudice to the lien.

• (3) Any power conferred by or by virtue of this section to require a registered friendly society or other person to produce books or papers includes power—

• (a) if the books or papers are produced, to take copies of them or extracts from them and to require that person, or any other person who is an officer or former officer of, or is or was at any time employed by, the society in question, to provide an explanation of them;

• (b) if the books or papers are not produced, to require the person who was required to produce them to state, to the best of his knowledge and belief, where they are.

• (4) Subject to subsection (5) below, if a requirement to produce books or papers or provide an explanation or make a statement which is imposed by virtue of this section is not complied with, the society or other person on whom the requirement was so imposed shall be guilty of an offence under the principal Act and liable on summary conviction to a fine not exceeding £400.

• (5) Where a person Is charged with an offence under subsection (4) above in respect of a requirement to produce any books or papers, it shall be a defence to prove that they were not in his possession or under his control and that it was not reasonably practicable for him to comply with the requirement.

• (6) A statement made by a person in compliance with a requirement imposed by virtue of this section (including any explanation provided under subsection (3) (a) above) may be used in evidence against him.

• (7) The provisions of this section apply in relation to a registered branch of a registered friendly society as they apply in relation to such a society.

Cancellation and suspension of registration

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In order—