All cheques should be signed in accordance with the rules of the society.
Cheques drawn by, or on behalf of, a registered Friendly Society are exempt from stamp duty. The Friendly Societies Act, 1906. Section 33, provides that stamp shall not be chargeable upon a " draft or order or receipt given by or to a registered society or branch in respect of money pay able by virtue of its rules or of this Act." By Section 41 of the Building Societies Act. 1874 : " No rules of any society under this Act, nor any copy thereof, nor any power, war rant, or letter of attorney. granted or to be granted by any person as trustee for the society for the transfer of any share in the public funds standing in his name, nor any receipts given for any dividend in any public stock or fund, or interest of Exchequer bills, nor any receipt. nor any entry in any book of receipt, for money deposited in the funds of the society, nor for any money received by any member, his executors or administrators, assigns, or attorneys. from the funds of the society, nor any transfer of any share, nor any bond or other security to be given to or on account of the society, or by any officer thereof, nor any order on any officer for payment of money to any member, nor any appointment of any agent, nor any certificate or other instrument for the revocation of any such appointment, nor any other instrument or document what ever required or authorised to be given, issued, signed, made, or produced in pur suance of this Act, or of the rules of the society, shall be subject or liable to or charged with any stamp duty or duties whatsoever, provided that the exemption shall not extend to any mortgage."
An advance to a building society should, preferably, be made upon a separate loan account and not upon the ordinary current account. so that the danger of making advances in excess of the society's powers to borrow may be avoided.
When a mortgage to a building society is repaid. the society has power to indorse a receipt for the money upon the mortgage deed. The effect of such a receipt is to " vacate the mortgage," that is, it operates as a re-conveyance to the mortgagor. This statutory receipt is exempt from stamp duty. (See STATUTORY RECEIPT.) With respect to unincorporated societies, by Section S9 of the Stamp Act, 1891, the exemption from stamp duty conferred by the Building Societies Act, 1S36, 6 LS: 7 Will. c. 32. for the regulation of benefit building societies. shall not extend to any mortgage made after July 31, 1868. except a mortgage by a member of a benefit build ing society for securing the repayment to the society of money not exceeding /500.