Friendly Societies Act 1974

The Registry of Friendly Societies

The Registry Office

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Terms of office, qualifications and status of Chief and assistant registrars

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Registration areas and functions of assistant registrars in those areas

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Finality of awards for dissolution or distribution of funds.

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Report of the Chief Registrar and publication of information relating to friendly societies

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Registration of societies and branches

Societies which may be registered

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• (1) Subject to subsections (2) and (3) below and also to section 9 below, the following societies may remain registered under this Act, that is to say,—

• (a) societies (in this Act called “friendly societies”) for the purpose of providing by voluntary subscriptions of the members, with or without the aid of donations, for any purpose falling within Schedule 2 to the 1992 Act;

• (b) societies (in this Act called “cattle insurance societies”) for the purpose of insurance to any amount against loss of cattle, sheep, lambs, swine, horses, and other animals by death from disease or otherwise;

• (c) societies (in this Act called “benevolent societies”) for any benevolent or charitable purpose;

• (d) societies (in this Act called “working men’s clubs”) for purposes of social intercourse, mutual helpfulness, mental and moral improvement and rational recreation;

• (e) societies (in this Act called “old people’s home societies”) for the purpose of providing homes for the members and others at any age after fifty;

• (f) societies (in this Act called “specially authorised societies”) for any purpose which the Treasury may authorise as a purpose to which the provisions of this Act, or such of them as are specified in the authority, ought to be extended but no society may become registered under this Act after the commencement of section 93 of the 1992 Act.

• (2) A society may not be registered under this Act unless—

• (a) the rules of the society contain provisions in respect of the several matters mentioned in Part I of Schedule 2 to this Act and, in the case of a friendly society or cattle insurance society, also contain provisions in respect of the several matters mentioned in Part II of that Schedule; and

• (b) the place which under the society’s rules is to be the society’s registered office is situated in the United Kingdom, the Channel Islands or the Isle of Man; and

• (c) the society consists of at least seven persons.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) Where any provisions of this Act are specified in an authority given under paragraph (f) of subsection (1) above, those provisions only shall extend to a society which has been registered as a specially authorised society by virtue of that authority.

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Registration of societies

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Special provisions as to dividing societies and societies assuring annuities

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• (1) A society which is neither a benevolent society nor a working men’s club shall not be disentitled to registration by reason of any rule for, or practice of, dividing any part of the funds thereof, if the rules of the society contain distinct provision for meeting all claims upon the society existing at the time of the division before any such division takes place.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Societies registered in one registration area carrying on business in another

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Additional requirements for registration of societies with branches

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• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) A society having a fund under the control of a central body to which every branch is bound to contribute may be registered as a single society, . . ..

Establishment of new branches

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• (1) There shall be sent to the FCA, under the hand of the secretary of a registered society,—

• (a) notice of the establishment of every new branch of the society;

• (b) notice of the place where the registered office of the branch, to which all communications and notices may be addressed, is to be situated;

• (c) if the branch is to have trustees or officers authorised to sue and be sued on its behalf, other than the trustees or officers authorised to sue and be sued on behalf of the society, a list of the names of those trustees or officers; and

• (d) two copies of the rules of the branch.

• (2) A society shall not be entitled to any of the privileges of this Act as a registered society with respect to a branch until the branch has been registered . . ..

Registration of branches as societies

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• (1) A body which has been registered as a branch of a society shall not be registered as a society after the commencement of section 93 of the 1992 Act.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Name of seceding or expelled branch

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A body which, having been a branch of a society, has wholly seceded or been expelled from that society, shall not thereafter use the name of that society or any name implying that it is a branch thereof, or the number by which it was designated as such a branch.

Acknowledgment of registration

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• (1) On being satisfied that a society or branch has complied with the provisions of this Act as to registration, the registrar shall issue to that society or branch an acknowledgment of registration which, in the case of a society, shall specify the designation thereof according to the classification in section 7 above.

• (2) An acknowledgment under subsection (1) above shall be conclusive evidence that the society or branch therein mentioned is duly registered under this Act, unless it is proved that the registration of the society or, in the case of a branch, the society of which it is a branch, has been suspended or cancelled.

Appeals from refusal to register

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• (1) If the FCA refuses to register a branch, the branch may appeal to the High Court or, in the case of a branch whose registered office is to be situated in Scotland, the Court of Session.

• (2) If a refusal to register a . . . branch is overruled on appeal, the FCA shall give an acknowledgment of registration under section 15A above to the . . . branch.

Provisions as to rules

Acknowledgment of registration of rules

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Registration of amendments of rules of society or branch

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• (1) Subject to subsection (2) below, any amendment of the rules of a society or branch as for the time being registered under this Act shall not be valid until the amendment has been so registered, and for this purpose copies of the amendment, signed by three members and the secretary of the society or of the branch, as the case may be, shall be sent to the FCA.

• (2) Subsection (1) above shall not apply to a change in the situation of the registered office of a society or branch, but—

• (a) notice of any change in the situation of the registered office of a society or branch shall be sent to the FCA and, in the case of a change in the situation of the registered office of a branch, shall be sent to the FCA through an officer appointed in that behalf by the society of which the branch forms part; and

• (b) where notice of such a change is sent to the FCA under paragraph (a) above, the FCA shall register it as an amendment of the rules of the society or branch concerned.

Acknowledgment of registration of amendments of rules

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On being satisfied that any amendment of the registered rules of a society or branch is not contrary to the provisions of this Act, the FCA shall issue to the society or branch, in respect of that amendment, an acknowledgment of registration which shall be conclusive evidence that the amendment is duly registered.

Appeals from refusal to register amendment of rule

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• (1) If the FCA refuses to register an amendment of a rule of a registered society or branch, the society or branch may appeal to the High Court or, in the case of a society or branch whose registered office is situated in Scotland, the Court of Session.

• (2) If a refusal to register an amendment of a rule is over-ruled on appeal, the FCA shall give an acknowledgment of registration under section 19 above to the society or branch.

Duty to supply copies of rules

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Every registered society or branch shall deliver to any person on demand, on payment of a reasonable fee, a copy of the rules of the society or branch.

Rules of certain registered societies to bind members at law

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• (1) The rules of—

• (a) a registered cattle insurance society or branch, and

• (b) such specially authorised societies or branches thereof as the Treasury may allow to take the benefit of this section,

shall bind the society or branch and the members thereof, and all persons claiming through them, to the same extent as if each member had subscribed his name and affixed his seal hereto, and as if there were contained in the rules a covenant on the part of himself and his executors or administrators to conform to the rules subject to the provisions of this Act.

• (2) All sums of money payable by a member to a society or branch falling within subsection (1) above shall be deemed to be a debt due from the member to the society or branch and shall be recoverable as such in the county court for the district in which the member resides.

• (2A) In the application of subsection (2) to England and Wales, for the words “for the district in which the member resides” there shall be substituted “if the member resides in England and Wales”.

• (3) In the application of this section to Scotland, in subsection (1) the words “and affixed his seal” shall be omitted, and in subsection (2) for the words “in the county court for the district” there shall be substituted the words “ before the sheriff of the sheriffdom ”.

Special provisions which may be included in rules

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• (1) The rules of a registered society or branch may provide for the reinsurance, to such extent as may from time to time be approved by a qualified actuary, of risks of any class against which persons are, or are to be, insured by that society or branch.

• (2) The rules of a registered society which is a specially authorised society complying with the provisions of subsection (3) below may provide that it may receive deposits and borrow money at interest from its members or from other persons, and upon the registration of such a rule the same shall be valid.

• (3) A specially authorised society complies with the provisions of this subsection if it has for its object the creation of funds to be lent out to the members of the society or for their benefit, and has in its rules provisions—

• (a) that no part of its funds shall be divided by way of profit, bonus, dividend or otherwise among its members; and

• (b) that all money lent to members shall be applied to such purpose as the society or its committee may approve.

Trustees and Officers

Trustees of registered societies and branches

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• (1) Every registered society and branch shall have one or more trustees.

• (2) The trustees may be appointed—

• (a) by a resolution of the society or branch in general meeting; or

• (b) in such other manner as the rules of the society or branch may provide.

• (3) If a trustee is appointed under subsection (2)(a) above, the society or branch shall send to the FCA a copy of the resolution appointing him, signed by the trustee so appointed and by the secretary of the society or branch.

• (4) If a trustee is appointed under subsection (2)(b) above, the society or branch shall send to the FCA—

• (a) notice of his appointment signed by the secretary of the society or branch; and

• (b) an acceptance of office signed by the trustee so appointed.

• (5) In the case of the appointment of a trustee of a branch, any document referred to in subsection (3) or (4) above shall be sent to the FCA through an officer appointed in that behalf by the society of which the branch forms part.

• (6) The same person may not be a secretary or treasurer of a registered society or branch and also a trustee of that society or branch.

Minors not to hold office

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A minor shall not be a member of the committee, or a trustee, manager or treasurer, of a registered society or branch.

Proof of appointment of officers and trustees

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If any such list as is referred to in section 12(1)(c) above is signed—

• (a) by every trustee and other officer named in the list; and

• (b) by the secretary of the branch,

then on the registration of the branch the list shall be evidence that the persons so named have been duly appointed.

Certain officers to give security

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Duty of officers of registered societies and branches to account

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Accounts, audit and auditors

Books of account, etc.

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• (1) Every registered society and branch shall—

• (a) cause to be kept proper books of account with respect to its transactions and its assets and liabilities, and

• (b) establish and maintain a satisfactory system of control of its books of account, its cash holdings and all its receipts and remittances.

• (2) For the purposes of subsection (1)(a) above, proper books of account shall not be taken to be kept with respect to the matters mentioned in that paragraph unless there are kept such books as are necessary to give a true and fair view of the state of the affairs of the society or branch and to explain its transactions.

• (3) Any book of account to be kept by a registered society or branch may be kept either by making entries in bound books or by recording the matters in question in any other manner.

• (4) Where any such book of account is not kept by making entries in a bound book but by some other means, the society or branch shall take adequate precautions for guarding against falsification and for facilitating its discovery.

General provisions as to accounts and balance sheets

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• (1) Every revenue account of a registered society or branch shall give a true and fair view—

• (a) if it deals with the affairs of the society or branch as a whole, of the income and expenditure of the society or branch as a whole for the period to which the account relates; and

• (b) if it deals with a particular business conducted by the society or branch, of the income and expenditure of the society or branch in respect of that business for the period to which the account relates.

• (2) Every registered society or branch shall, in respect of each year of account, cause to be prepared either—

• (a) a revenue account which deals with the affairs of the society or branch as a whole for that year; or

• (b) two or more revenue accounts for that year which deal separately with the particular businesses conducted by the society or branch.

• (3) In a case falling within subsection (2)(b) above, without prejudice to the application of subsection (1)(b) above to each revenue account dealing with a particular business conducted by a society or branch, the revenue accounts in question, when considered together, shall give a true and fair view of the income and expenditure of the society or branch as a whole for the year of account to which they relate.

• (4) Subject to subsection (5) below, every balance sheet of a registered society or branch shall give a true and fair view, as at the date of the balance sheet, of the state of the affairs of the society or branch.

• (5) Subsection (4) above does not apply in the case of—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) a specially authorised society or branch which, by virtue of a direction in the authority for registering that society or branch, is required to carry out a valuation under section 41 below,

but every balance sheet of a society or branch falling within . . . paragraph (b) above shall give a true and fair view, as at the date of the balance sheet, of the assets and current liabilities of the society or branch and the resulting balances of its funds.

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) Without prejudice to the provisions of subsection (6) above, a registered society or branch falling within paragraph (a) or paragraph (b) of subsection (5) above shall not publish any balance sheet which does not include a statement containing the same particulars as the statement required to be included in the annual return of that society or branch by section 43(5) below.

• (8) If in relation to any revenue account, revenue accounts or balance sheet of a registered society or branch, a member of the committee thereof fails to take all reasonable steps to secure compliance—

• (a) with subsection (1), subsection (4) or, as the case may require, subsection (5) above, or

• (b) in a case falling within subsection (2)(b) above, with subsection (3) above,

he shall be liable on summary conviction to a fine not exceeding level 5 on the standard scaleunless he proves that he had reasonable grounds to believe, and did believe, that a competent and reliable person was charged with the duty of seeing that the relevant provision was complied with and was in a position to discharge that duty.

Obligation to appoint auditors

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• (1) Subject to the following provisions of this section and section 32A(1) below, every registered society and branch shall, in each year of account, appoint a qualified auditor or qualified auditors to audit its accounts and balance sheet for that year.

• (2) Subsection (1) above shall not apply to a society or branch . . . if—

• (a) the receipts and payments of that society or branch in respect of the preceding year of account did not, in the aggregate, exceed £5,000; and

• (b) the number of its members at the end of that year did not exceed 500; and