Office of Public Sector Information
Section 7.
1 An incorporated friendly society may do anything mentioned in the following provisions of this Schedule in the manner directed by the society’s rules.
2 (1) An incorporated friendly society may, out of any separate loan fund to be formed by contributions or deposits from its members, make loans to members on their personal security, with or without sureties or, in Scotland, cautioners, subject to the restrictions in sub-paragraphs (2) to (4) below.
(2) A loan shall not at any time be made out of money contributed otherwise than for the purpose of the loan fund.
(3) A member shall not be capable of holding any interest in the loan fund exceeding £800.
(4) The society shall not—
(a) make any loan to a member on personal security beyond the amount fixed by the rules, or make any loan which, together with any money owing by a member to the society, exceeds £200; or
(b) hold at any one time on deposit from its members any money beyond the amount fixed by the rules, and the amount so fixed shall not exceed two thirds of the total sums owing to the society by the members who have borrowed from the loan fund.
(5) The Commission may by order made with the consent of the Treasury amend sub-paragraph (3) or (4) above to substitute, for the sum for the time being specified in that sub-paragraph, such greater sum as is specified in the order.
3 (1) An incorporated friendly society may set up and administer a fund for the purchase, on behalf of members contributing thereto, of Defence Bonds, National Savings Certificates, Ulster Savings Certificates or such other securities of Her Majesty’s Government as the Commission may prescribe.
(2) A society may allow persons to become members of the society for the purpose only of contributing to a fund set up by virtue of this paragraph.
(3) Any securities prescribed, before the commencement of this paragraph, for the purposes of section 47 of the 1974 Act shall be treated as having been prescribed under sub-paragraph (1) above.
4 (1) An incorporated friendly society may invest funds of the society in subscribing for any of the share or loan capital of a housing association (within the meaning of the Housing Associations Act 1985) other than shares or debentures not fully paid up at the time of issue.
(2) This paragraph has effect without prejudice to any power the society may have by virtue of section 14 above.
5 An incorporated friendly society may accumulate at interest, for the use of any member, any surplus of his contributions to the funds of the society which may remain after providing for any assurance in respect of which they are paid and for the withdrawal of the accumulations.
6 An incorporated friendly society may subscribe out of its funds to any hospital, infirmary, charitable or provident institution, any annual or other sum which may be necessary to secure to members of the society and their families the benefits of that institution.
7 An incorporated friendly society may contribute to the funds and take part in the government of any other friendly society.
Section 7.
1 Under the law of England and Wales and Northern Ireland a contract may be made—
(a) by an incorporated friendly society, by writing under its common seal; or
(b) on behalf of an incorporated friendly society, by any person acting under its authority, express or implied;
and any formalities required by law in the case of a contract made by an individual also apply, unless a contrary intention appears, to a contract made by or on behalf of an incorporated friendly society.
2 (1) The following provisions have effect with respect to the execution of documents by an incorporated friendly society under the law of England and Wales and of Northern Ireland.
(2) A document is executed by an incorporated friendly society by the affixing of its common seal.
(3) An incorporated friendly society need not have a common seal, however, and the following sub-paragraphs apply whether it does or not.
(4) A document signed by a member of the committee of management and the secretary of an incorporated friendly society, or by 2 members of the committee of management, and expressed (in whatever form of words) to be executed by the society has the same effect as if executed under the common seal of the society.
(5) A document executed by an incorporated friendly society which makes it clear on its face that it is intended by the person or persons making it to be a deed has effect, upon delivery, as a deed; and it shall be presumed, unless a contrary intention is proved, to be delivered upon its being so executed.
(6) In favour of a purchaser a document shall be deemed to have been duly executed by an incorporated friendly society if it purports to be signed by a member of the committee of management and the secretary of the society, or by 2 members of the committee of management, and, where it makes it clear on its face that it is intended by the person or persons making it to be a deed, to have been delivered upon its being executed.
(7) In sub-paragraph (6) above a “purchaser” means a purchaser in good faith for valuable consideration and includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property.
3 (1) The following provisions have effect with respect to the execution of documents by an incorporated friendly society under the law of Scotland.
(2) For any purpose other than those mentioned in sub-paragraph (3) below, a document is validly executed by an incorporated friendly society if it is signed on behalf of the society by a member of the committee of management or by the secretary of the society or by a person authorised to sign the document on its behalf.
(3) For the purposes of any enactment or rule of law relating to the authentication of documents under the law of Scotland, a document is validly executed by an incorporated friendly society if it is subscribed on behalf of the society by—
(a) 2 members of the committee of management of the society;
(b) a member of that committee and the secretary of the society; or
(c) 2 persons authorised to subscribe the document on behalf of the society,
notwithstanding that such subscription is not attested by witnesses and the document is not sealed with the society’s common seal.
(4) A document which bears to be executed by an incorporated friendly society in accordance with sub-paragraph (3) above is, in relation to such execution, a probative document.
(5) Notwithstanding any other provision of this paragraph, an incorporated friendly society need not have a common seal.
(6) For the purposes of any enactment providing for a document to be executed by an incorporated friendly society by affixing its common seal or referring (in whatever terms) to a document so executed, a document signed or subscribed on behalf of the society by—
(a) 2 members of the committee of management of the society;
(b) a member of the committee and the secretary of the society; or
(c) 2 persons authorised to subscribe the document on behalf of the society,
shall have effect as if executed under the common seal of the society.
(7) In this paragraph “enactment” includes an enactment contained in a statutory instrument.
(8) Sub-paragraphs (2) and (3) above are—
(a) without prejudice to any other method of execution of documents by incorporated friendly societies permitted by any enactment or rule of law; and
(b) subject to any other enactment making express provision, in relation to incorporated friendly societies, as to the execution of a particular type of document.
Friendly Societies Act 1992