Change in our Society (Act): A Summary of Recent Amendments
Introduced in 2016, the British Columbia Societies Act (the “Act”) provides a legal framework for organizations dedicated to a non-profit purpose. Ongoing stakeholder consultations revealed outstanding gaps and concerns in the legislation, which in 2021 led the provincial government to pass Bill 19, the Societies Amendment Act, to improve clarity, transparency, and efficiency in the governance of societies.
As of May 4, 2023, several changes to the Act have come into effect. If you are a director, member, or employee of a BC society, or otherwise interested, read on to learn how some of the key amendments might affect you moving forward.
New Disclosure and Record-Keeping Requirements
All BC societies are required to maintain a register of directors and a register of members. The amendments have clarified the scope of these registers. Going forward, the register of directors must include the dates that each director starts and ceases to hold office. The register of members must only include the name and contact information of each member and, if applicable, their class of membership; no other information is permitted.
The amendments have also increased reporting requirements for employee and contractor remuneration. While in the past societies needed to report on the ten highest-paid employees and contractors; now, societies must report all remuneration over $75,000. This means that your financial statements must identify each employee and contractor who receives more than $75,000 per year.
Should your society dissolve voluntarily, you must now appoint a record keeper, responsible for maintaining the records, without damage or loss, for a period of three years following the dissolution. Records must be kept or electronically accessible at a location in BC.
Changes Affecting General Meetings and Member Proposals
At general meetings, members are no longer allowed to vote by proxy unless the bylaws provide for this option.
The amendments have clarified and adjusted some logistics related to the calling of general meetings. If your society has 100 or more members, it is deemed to have provided notice of a general meeting by emailing all members and publishing in a newspaper or on the society’s website, if permitted by the bylaws. Keep in mind that minutes must be kept for general meetings but must not be kept for other gatherings of members.
The Act allows members of a society to make proposals they wish to have considered at an annual general meeting (“AGM”), the requirements for which have been clarified by the amendments. Member proposals may now be up to 500 words and must include any special resolutions that may need to be considered in relation to the proposal. For a member’s proposal to be considered, they must personally be present at the meeting. If a substantially similar matter has been considered at a recent general meeting, the society may decline to consider the member’s proposal.
Amendments to Directors’ Terms and Responsibilities
The Act now provides that directors’ terms automatically end at the AGM following their appointment or election, unless the bylaws provide otherwise. Should you wish to have directors hold office for a term different than the default, be sure this is stated in the bylaws.
Directors are no longer permitted to vote by proxy at directors’ meetings, meaning a director must personally be present in order to vote on any resolutions. If the directors wish to pass a resolution without a meeting, they must send a copy of the resolution to all directors in advance. All directors must consent to pass the resolution without a meeting, unless the bylaws specify that consent from a lesser number of directors is sufficient. If directors wish to pass resolutions without a meeting or unanimous consent, the bylaws may need to be amended to reflect this.
The amendments have also changed the requirements surrounding conflicts of interest. A director or senior manager who has a direct or indirect material interest in a contract, transaction, or other matter has certain disclosure requirements and must abstain from voting. The Act now specifies that this includes any interest that is known or reasonably ought to have been known. If a director or senior manager reasonably ought to know of a conflict, they must notify the other directors and comply with the requirements as provided for under section 56 of the Act. Previously, a conflicted director or senior manager was required to leave the directors’ meeting if the directors would be discussing or voting on the matter of their conflict. They may now be permitted to remain if asked to do so by another director, or, if required in the bylaws, by more than one other director.
Changes Specific to Member-Funded Societies
A member-funded society is funded primarily by its members to carry on activities for the benefit of its members. Such a society cannot receive government funding or public donations over a specified amount, or it will lose its member-funded status. However, under the new amendments, testamentary gifts from certain donors are excluded from the definition of public donations. A member-funded society may now receive funds from the will of a former member, director, or senior manager, or a relative of these individuals, without losing their member-funded status. This will enable member-funded societies to raise more funds and simultaneously enable more freedom in testamentary giving.
What Does This Mean for You?
Feeling overwhelmed by the changes? Here is a quick non-exhaustive checklist to help you determine whether your bylaws may need amendments:
- For a resolution to be passed without a directors’ meeting or unanimous consent of the directors, the bylaws must specify the number of directors required to consent without a meeting.
- If directors are to hold their positions for a period of time other than until the first AGM after becoming a director, the bylaws must provide for this.
- If more than one director must request a conflicted director or senior manager to stay in a meeting regarding the subject matter of their conflict, the number of directors required must be specified in the bylaws.
- If members are to be allowed to vote by proxy at general meetings, the bylaws must provide for this.
Our Business Law team is knowledgeable, flexible, and ready to meet the needs of your organization. If you require assistance regarding the impact of the amendments on your organization, contact Myles Brown, Dan Fogarty, or Özge Yazar.