Building Societies Act 1962
|Publication Date:||January 01, 1962|
Building Societies Act, 1962
(10 & 11 Eliz. 2) CHAPTER 37
An Act to consolidate (with corrections and improvements made under the Consolidation of Enactments (Procedure) Act, 1949) the Building Societies Acts, 1874 to 1960, and certain related enactments, except certain provisions of those Acts relating to the winding up of building societies and provisions relating to unincorporated societies.
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Constitution of Building Societies
1 Establishment of building society.
(1) The purpose for which a society may be established under this Act is that of raising, by the subscriptions of the members, a stock or fund for making advances to members out of the funds of the society upon security by way of mortgage of freehold or leasehold estate.
(2) A society so established may be either—
(a ) a permanent society, that is to say, a society which has not by its rules any fixed date at which, or specified result on the attainment of which, it is to terminate, or
(b ) a terminating society, that is to say, a society which by its rules is to terminate at a fixed date, or when a result specified in the rules is attained.
(3) Any number of persons, not being less than ten, may establish a society under this Act by—
(a ) agreeing upon rules for the government of the society being rules which comply with the requirements of this Act relating to rules of building societies, and
(b ) sending to the central office two copies of those rules signed by not less than ten of those persons (or, if there are only ten, by all of them) and by the intended secretary or other officer.
(4) In this Act ‘building society’ means a society incorporated under this Act or under the enactments repealed by this Act
Provided that, except where it is otherwise expressly stated ‘building society’ in this Act does not include a Northern Ireland society.
(5) In the application of this Act to Scotland—
(a ) for any reference to freehold or leasehold estate there shall be substituted a reference to an interest in land and any reference to making an advance upon security by way of mortgage of freehold or leasehold estate, or on the security of such estate as aforesaid or other the like reference, shall be construed as a reference to making an advance upon a heritable security
(b ) ‘a mortgage’ means a heritable security, ‘mortgagor’ and ‘mortgagee’ mean respectively the debtor and creditor in a heritable security, and the expressions ‘on mortgage’, ‘mortgaged’ and ‘mortgage deed’ shall be construed accordingly.
2 Registration of rule and name of society.
(1) Where copies of rules have been sent to the central office in accordance with subsection (3) of the preceding section, the central office, if satisfied that the rules comply with the requirements mentioned in that subsection, shall (subject to the next following subsection) retain and register one copy of the rules and return the other copy to the secretary or other officer of the society, together with a certificate of incorporation.
(2) A society shall not be registered under this section in a name which, in the opinion of the central office, is undesirable.
3 Incorporation of society.
(1) On the receipt by a society of a certificate of incorporation under the last preceding section, the society shall become a body corporate by the name in which it is registered thereunder, having perpetual succession and a common seal.
(2) The common seal of a building society shall bear the registered name of the society.
4 Contents of rules.
(1) The rules of every building society shall set out—
(a ) the name of the society and its chief office or place of meeting;
(b ) the manner in which the stock or funds of the society is or are to be raised;
(c ) the terms on which unadvanced subscription shares are to be issued, and the manner in which contributions are to be paid to the society and withdrawn by the members, with tables (where, in the opinion of the central office, they are applicable) showing the amount due by the society for principal and interest respectively;
(d ) the terms on which paid-up shares (if any) are to be issued and withdrawn, with tables (where, in the opinion of the central office, they are applicable) showing the amount due by the society for principal and interest respectively;
(e ) whether preferential shares are to be issued, and if so, within what limits;
(f ) the purposes to which the funds of the society are to be applied;
(g ) the manner in which advances are to be made and repaid, the deductions (if any) for premiums, and the conditions on which a borrower can redeem the amount due from him before the end of the period for which the advance was made, with tables (where, in the opinion of the central office, they are applicable) showing the amount due from the borrower after each stipulated payment;
(h ) the manner in which losses are to be ascertained and provided for;
(i ) whether the society intends to borrow money, and if so, within what limits, not exceeding those prescribed by this Act;
(j ) the manner in which membership is to cease;
(k ) the manner of remunerating auditors, and the manner of appointing, remunerating and removing the board of directors and other officers;
(l ) the powers and duties of the board of directors and other officers;
(m ) provision for the custody of the mortgage deeds and other securities belonging to the society;
(n ) whether disputes between the society and any of its members, or any person claiming by or through a member, or under the rules, are (subject to the provisions of this Act) to be settled by reference to the court, to the central office or to arbitration;
(o ) the fines and forfeitures to be imposed on members of the society;
(p ) provision for the device, custody and use of the society's common seal;
(q ) the manner in which the society (whether permanent or terminating) may be terminated or dissolved.
(2) The rules of a building society shall also provide for the calling and holding of meetings, and in particular—
(a ) for the right of members to requisition meetings;
(b ) for the manner in which notice of any resolutions to be moved at meetings is to be given to members;
(c ) for the procedure to be observed at meetings;
(d ) for the form of notice for the convening of a meeting, and the manner of its service; and
(e ) for the voting rights of members, the right to demand a poll and the manner in which a poll is to be taken.
(3) In the case of a building society incorporated on or after the first day of October, nineteen hundred and sixty, the rules shall include provision authorising the issue of paid-up shares in accordance with subsection (1) of section thirteen of this Act:
Provided that this subsection shall not apply to a building society which, before its incorporation, was an unincorporated society certified under the Act of 1836.
(4) The rules of a building society may describe in a schedule thereto the forms of conveyance, mortgage, transfer, agreement, bond, security for deposit or loan or other instrument necessary for carrying its purposes into execution.
(5) The preceding provisions of this section shall have effect without prejudice to the provisions of this Act as to rules which are void as therein mentioned, and shall have effect subject to the provisions of Part VIII of this Act with respect to societies established before the commencement of this Act.
5 Effect of rules.
5. The rules of a building society are binding upon each of the members and officers of the society, and on all persons claiming on account of a member or under the rules; and all such members, officers and persons shall be deemed to have full notice of the rules.
6 Power to raise and repay funds.
(1) A building society may from time to time raise funds by the issue of shares of one or more denominations, either as shares paid up in full or as shares to be paid by periodical or other subscriptions, and with or without accumulating interest.
(2) A building society may repay any funds so raised when they are no longer required for the purposes of the society.
7 Powers in relation to land.
(1) A building society shall, so far as is necessary for the purpose for which it is established, have power to hold land with the right of foreclosure.
(2) A building society may purchase, build, hire or take on lease a building for conducting its business and may adapt and furnish it.
(3) A building society may purchase or hold on lease any land for the purpose only of erecting on it a building for conducting the business of the society.
(4) A building society may sell, exchange or let the whole or part of any such building or land as is mentioned in subsection (2) or subsection (3) of this section.
8 Members who are not shareholders.
(1) The rules of a building society may allow a person to become a member without holding a share in the society.
(2) Such of the rules as concern the making of advances to members need not be expressed in terms which treat a member to whom an advance is made as being, by reason of the making of the advance, the holder of a share in the society.
9 Members under age of twenty-one.
9. A person under the age of twenty-one years may, if the rules do not otherwise provide, be admitted as a member of a building society, and can...
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