Background

On October 28, 2021 BC’s Societies Amendment Act, 2021 (Amendment Act) received Royal Assent. Royal Assent means a bill becomes law. But it doesn’t always mean that the whole law is in effect. With the Amendment Act, a number of sections did come into effect; however, many other sections came into effect on May 4, 2023, by way of Order-in-Council. You can see the full listing at the bottom of this post.

What are the changes and what is in effect now?

Here’s an overview of the amendments. It’s not comprehensive, but it highlights the key changes. The amendments are sorted by category and by effective date. The relevant section in the Societies Act and the Amendment Act are listed along with each change. You can also take a look at BC’s FAQ about the changes.

Directors

EFFECTIVE MAY 2023:

• Unless bylaws provide otherwise, directors without a set term of office will cease being directors at the end of the first AGM after becoming a director (Societies Act s 11(1), Amendment Act s 2)
• Director register must include the start and end date for directors (Societies Act s 20, Amendment Act s 3)
• Directors can apply (using a newly introduced application) to the registrar to have their name removed when it is included in error (Societies Act s 51.1, Amendment Act s 15)

EFFECTIVE OCT 2021:

• Conflict of interest disclosure is required if a director or senior manager knows or reasonably ought to know about the conflict (Societies Act s 56, Amendment Act s 17)
• Anyone who was found incapable of managing their own affairs but has since been found capable is allowed to be a director (Societies Act s 44(3), Amendment Act s 10)

Director meetings

EFFECTIVE MAY 2023:

• Conflicted directors or senior managers can stay in meetings to provide information if asked by a single other director, unless bylaws provide a different number (Societies Act ss 56, 62, Amendment Act ss 18-20) (but note that s 19 came into effect on royal assent)
• If a director is reasonably unaware of a conflict of interest, the director is not required to disclose that conflict (Societies Act s 56(1), Amendment Act s 16)
• Directors’ resolutions can only be passed without a meeting if
  • a copy of the resolution has been sent to all directors (Societies Act s 54, Amendment Act s 16)
  • all directors consent, unless the bylaws allow a lesser number (Societies Act s 54, Amendment Act s 16)
• No proxy or alternative directors can vote at directors’ meetings (Societies Act s 54, Amendment Act s 16)

Extraprovincial non-share corporations

EFFECTIVE OCT 2021:

• Must reserve its own name if it’s available to use in B.C. (Societies Act s 171, Amendment Act s 46)
• Does not have to file an annual report in the year it first registers (Societies Act s 177, Amendment Act s 49)

Member register

EFFECTIVE OCT 2021:

• Members are limited as to what they use a copy of the register of members for – it must be for matters related to the activities or internal affairs of the society (Societies Act s 27.1, Amendment Act s 7)
• Information in the register of members is limited to only name, member class and contact information, including email addresses (Societies Act s 27.1, Amendment Act s 7)

Member meetings

EFFECTIVE MAY 2023:

• Notice must be in writing and include date, time, location and any special resolutions (Societies Act ss 77-78, Amendment Act ss 22-23)
• If bylaws allow and there are 100 members, a notice of general meeting can be sent by email (Societies Act s 77, Amendment Act, s 22)
• Member proposals have new requirements – word limit of 500, submitting member must be present at the meeting, must include any special resolutions to be considered, doesn’t have to be considered if substantially the same as one considered at a recent general meeting (Societies Act s 81, Amendment Act s 24)

EFFECTIVE OCT 2021:

• Minutes are required only for general meetings and not other gatherings (Societies Act s 20(1), Amendment Act s 4)
• meeting requisition word limit increased from 200 to 500 (Societies Act s 75, Amendment Act s 21)
• Proxy voting is not allowed unless bylaws provide for it (Societies Act s 85, Amendment Act s 25)

Reporting

EFFECTIVE MAY 2023:

• Societies must file a notice of correction if they’re aware of an error in the statement of directors and registered office (Societies Act s 51, Amendment Act s 14)

NOT YET IN FORCE:

• Disclosure remuneration of all employees and contractors over prescribed amount, currently $75,000 (Societies Act s 36(1)(b), Amendment Act s 9) *not yet in force*

Voluntary dissolution & record keeper

EFFECTIVE MAY 2023:

• Voluntarily dissolved societies must pass and file an ordinary resolution appointing a record keeper who has specific rights, responsibilities and powers (Societies Act, new sections, Amendment Act ss 28-35) *with the exception of sections 31-32

What now?

If your organization is a BC Society, you should look at these changes side-by-side with your bylaws (a “society” is an organization that is incorporated, amalgamated, continued or converted under the Societies Act) and ask whether your bylaws align with the amendments or whether you want to change your bylaws in ways that the amendments now permit.

For example, as it relates to directors, consider:

• Do your bylaws have director term limits?
• Does your directors’ register include start and end dates?
• What do your bylaws say about conflicted directors?
• Do your bylaws still allow for proxy votes at directors’ meetings?

Or, as it relates to members, consider:

• Do you collect more and record more member information than is allowed?
• What do your bylaws say about member proposals

Overview of what came into effect and when

For reference, here are the Amendment Act sections that came into force at Royal Assent and by Order-in-Council:

• In force upon Royal Assent (October 28, 2021) – sections 1, 4, 5, 6, 7, 10, 11, 17, 19, 21, 25-27, 46, 49, 54, 57, 60, 63, 66-68, 75, 77, 80, 82, 84, 88-89, 91, 93, 96, 98-99, 101, 103
• In force upon Order-in-Council 274/2023 (May 4, 2023) – sections 2, 3, 8, 12-16, 20, 22-24, 28-30, 33-35, 51, 53, 55, 56, 58, 59, 61, 64, 69, 71-73, 76, 78, 79, 81, 83, 90, 92, 94, 95, 97, 100, 102, 104-107, 110-114
• In force upon future Order-in-Council – sections 9, 18, 31-32, 36-45, 47-48, 50, 52, 62, 70, 74, 85-87
• In force at earlier date (November 28, 2016) – section 65

The post BC Societies Act Amendments, Part II appeared first on CCCC Blogs.

On October 28, 2021 B.C.’s Societies Amendment Act, 2021 (Amendment Act) received Royal Assent. That means the bill became law.  But in this case, even though the Bill has become law, only some sections are already in effect; others will come into effect at later dates. 

What are the changes and what is in effect now? The B.C. government has put together a helpful reference chart about the changes. It lists the changes by topic, summarizes what the change is, and shows whether the change is effective now (on royal assent) or to be decided. 

Here’s an overview of the amendments. It’s not comprehensive, but highlights some of the key changes. The ones that are in effect now are noted as “EFFECTIVE NOW.” It lists the relevant section in the Societies Act and the Amendment Act.

Directors

• EFFECTIVE NOW: Conflict of interest disclosure is required if a director or senior manager knows or reasonably ought to know about the conflict (Societies Act s 56, Amendment Act s 17)
• Unless bylaws provide otherwise, directors without a set term of office will cease being directors at the end of the first AGM after becoming a director (Societies Act s 11(1), Amendment Act s 2)
• Director register must include the start and end date for directors (Societies Act s 20, Amendment Act s 3)

Director meetings

• Conflicted directors or senior managers can stay in meetings to provide information if asked by a single other director, unless bylaws provide a different number (Societies Act ss 56, 62, Amendment Act ss 18-20)
• Directors’ resolutions can only be passed if a copy of the resolution has been sent to all directors (Societies Act s 54, Amendment Act s 16)
• Directors’ resolutions can only be passed if all directors consent, unless the bylaws allow a lesser number (Societies Act s 54, Amendment Act s 16)
• No proxy or alternative directors can vote at directors’ meetings (Societies Act s 54, Amendment Act s 16)

Extraprovincial non-share corporations

• EFFECTIVE NOW: Must reserve its own name if its available to use in BC (Societies Act s 171, Amendment Act s 46)
• EFFECTIVE NOW: Does not have to file an annual report in the year it first registers (Societies Act s 177, Amendment Act s 49)

Member register

• EFFECTIVE NOW: Members are limited as to what they use a copy of the register of members for – it must be for matters related to the activities or internal affairs of the society (Societies Act s 27.1, Amendment Act s 7)
• Information in the register of members is limited to name, member class and contact information, including email addresses (Societies Act s 20, Amendment Act s 3)

Member meetings

• EFFECTIVE NOW: Minutes are required only for general meetings and not other gatherings (Societies Act s 20(1), Amendment Act s 4)
• EFFECTIVE NOW: Meeting requisition word limit increased from 200 to 500 (Societies Act s 75, Amendment Act s 21)
• EFFECTIVE NOW: proxy voting is not allowed unless bylaws provide for it (Societies Act s 85, Amendment Act s 25)
• Notice must be in writing and include date, time, location and any special resolutions (Societies Act ss 77-78, Amendment Act ss 22-23)
• If bylaws allow and there are 100 members a notice of general meeting can be sent by email (Societies Act s 77, Amendment Act, s 22)
• Member proposals have new requirements – word limit of 500, submitting member must be present at the meeting, must include any special resolutions to be considered, doesn’t have to be considered if substantially the same as one considered at a recent general meeting (Societies Act s 81, Amendment Act s 24)

Reporting

• Societies must file a notice of correction if they’re aware of an error in the statement of directors and registered office (Societies Act s 51, Amendment Act s 14)
• Disclosure remuneration of all employees and contractors over prescribed amount, currently $75,000 (Societies Act s 36(1)(b), Amendment Act s 9)

Voluntary dissolution & record keeper

• Voluntarily dissolved societies must pass and file an ordinary resolution appointing a record keeper who has specific rights, responsibilities and powers (Societies Act, new sections, Amendment Act ss 28-35)

The post BC Societies Act Amendments, Part I appeared first on CCCC Blogs.

The British Columbia Ministry of Finance is looking for input on proposed amendments to the Societies Act.[1]

The Societies Act came into force on November 28, 2016 and since that time the government has been monitoring the implementation and application of the Act, as explained in a letter from the Deputy Minister. Various outreach activities prompted feedback which the Ministry has incorporated into the proposed amendments.

The goal of the 36 amendments is to eliminate ambiguity and inconsistency, address omissions, streamline and update processes, and remove burdensome filing requirements.

Among other things, the amendments propose to:

• Provide more accurate definitions; for example:
  • “General meeting” requiring notice will be limited to meetings where corporate business transactions take place; informal gatherings will be exempt (s 1)
  • Clarify which type of meeting (general or directors’) is being referred to in specific sections (s 20(1)(i), 105(1)(d), 108(1)(b), 115(3), 119(1))
• Update Board responsibilities and qualifications; for example:
  • Allow requalification for individuals who were once incapable of managing their own affairs but who are now capable (s 44)
  • Permit incorrectly listed directors to apply directly to the registrar to be removed (s 51)
  • Provide an excuse for unknown conflict of interest (s 56)
• Exclude bequests by affiliated individuals from the category of “public donations” so they do not affect a society’s ability to be a member-funded society (s 190)
• Expand remuneration reporting to include all employees or contractors paid more than $75,000 (currently only 10 highest paid are reported) (s 36(1)(b))
• Allow late transition applications (those filed after November 28, 2018) (s 240)
• Grant the Registrar power to dissolve a society for failing to file a transition application or returning a requested record (s 214)

Societies, their members, the legal community and the public are invited and encouraged to participate. Feedback can be submitted electronically or by paper. The deadline for feedback was August 23, 2019. Links to the proposed amendments, the Deputy Minister’s letter and the Societies Act Consultation page have been taken down. For general information on BC Societies, see Societies and The New Societies Act and Transition.

If you would like to receive blogs from me directly to your inbox about charity law and policy developments, including an update when the results of the Consultation are made available, please subscribe to Noteworthy today! Click here to receive it.

[1] SBC 2015 c 18

The post BC Societies Act Consultation appeared first on CCCC Blogs.

The law governing charities in British Columbia may change this year. Bill 24, the new Societies Act,[i] was introduced into the British Columbia legislature for its first reading on March 25, 2015.[ii] The new legislation would replace the current Society Act, which was enacted in 1977 and governs some 27,000 societies in British Columbia, ranging from small community-based organizations to large charitable organizations.[iii] The updated and modernized statute provides rules for the creation and governance of not-for-profit organizations in British Columbia. While the proposed legislation maintains the basic framework of the current act, the newer elements of the Societies Act are intended to improve and simplify the functioning of societies, while strengthening the accountability of charities to the public.

Publicly Funded Societies vs. Member-Funded Societies

The new Societies Act distinguishes between publicly funded societies and member-funded societies. Publicly funded societies include entities such as charities and other entities that receive significant public funding. Member funded societies, on the other hand, are societies funded mainly by its members to carry on activities for the benefit of its members. Member funded societies may take the form of sports clubs or professional organizations. The new Act provides different rules regarding corporate governance, financial disclosure, and distribution of money or other property on dissolution by societies that are not charities and do not receive a large amount of public funding.

While the member-funded societies will enjoy a reduced regulatory burden under the new Act, publicly funded societies will bear a greater regulatory burden through several new accountability measures.

Corporate and Governance Procedures

The new Societies Act also adopts specific corporate and governance procedures from British Columbia’s Business Corporations Act and other corporate legislation, yet generally provides societies with a greater flexibility in creating governance by-laws that can be tailored to suit the particular needs and preferences of the society and community it serves. Examples of adopted governance procedures include, but are not limited to, proxy voting[v] at members’ meetings,[vi] reducing the threshold to pass a special resolution from 75 percent to two thirds,[vii] and creating multiple classes of membership.

Mandatory Online Filing

The new Act will implement a mandatory online filing system whereby societies will be required to file documents, such as those pertaining to by-laws and incorporation, electronically with the corporate registry. Existing societies will be required to input their constitution and by-laws into an electronic, searchable database.

Other Noteworthy Amendments to the Act

Other areas affected by the new Act include:

• Record-keeping obligations, including what records must be maintained and who has access to those records
• Requirements to become a director and the election of directors
• Allowing societies to change unalterable by-law provisions by special resolution
• The requirement of by-law authorization if directors will receive compensation for their position as directors[viii]
• Disallowing societies from creating branch societies
• Introducing and defining a subsidiary of a society, which is a corporation (including a society) that is controlled by a society. If a member or security holder of a society that has a subsidiary requests a copy of the subsidiary’s most recent financial statements, and pays any corresponding fees, financial statements along with any reports prepared by the auditor must be provided.

Subject to the approval of the legislature, the Ministry of Finance has announced that the government expects the new Act will come into force when new regulations are finalized, approximately 18 months after royal assent. Once in force, apart from certain specific exceptions, the new governance rules would apply to all existing societies. However, they will have a two-year transition period to file a transition application and to adopt the changes to their constitution and by-laws as required by the new legislation. It should be noted that pre-existing societies may not alter their by-laws or amalgamate with other corporations until they have transitioned and are in compliance with the new Act.

[i] Bill 24 -2015: Societies Act, 4^th Session, 40^th Parliament, Legislative Assembly of British Columbia (retrieved April 13, 2015), online: <https://www.leg.bc.ca/40th4th/1st_read/gov24-1.htm#section78>.

[ii] Progress of Bills, 4^th Session, 40^th Parliament, Legislative Assembly of British Columbia: <https://www.leg.bc.ca/40th4th/votes/progress-of-bills.htm>.

[iii] “New Societies Act provides flexibility, accountability”, March 25, 2015, News Release, Ministry of Finance, British Columbia <http://www2.news.gov.bc.ca/news_releases_2013-2017/2015FIN0024-000396.htm>.

[iv] Note: this will not apply to pre-existing societies until two years after the new Societies Act comes into force.

[v] Proxy voting is a form of voting whereby some members of a decision-making body may delegate their voting power to other members of the same body to vote in their absence, and/or to select additional representatives.

[vi] However, proxy voting must be provided for in the by-laws.

[vii] Unless the by-laws provide for a higher threshold.

[viii] Again, pre-existing societies have two years after the new Act comes into force to comply with this provision.

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