{"id":18544,"date":"2015-04-16T10:05:56","date_gmt":"2015-04-16T14:05:56","guid":{"rendered":"https:\/\/www.cccc.org\/news_blogs\/?p=18544"},"modified":"2015-05-04T09:21:03","modified_gmt":"2015-05-04T13:21:03","slug":"british-columbias-proposed-new-societies-act","status":"publish","type":"post","link":"https:\/\/www.cccc.org\/news_blogs\/legal\/2015\/04\/16\/british-columbias-proposed-new-societies-act\/","title":{"rendered":"British Columbia\u2019s Proposed New Societies Act"},"content":{"rendered":"

Authored by Nevena Urosevic<\/em><\/p>\n

The law governing charities in British Columbia may change this year. Bill 24, the new Societies Act<\/em>,[i]<\/a> was introduced into the British Columbia legislature for its first reading on March 25, 2015.[ii]<\/a> The new legislation would replace the current Society Act<\/em>, 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]<\/a> 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<\/em> are intended to improve and simplify the functioning of societies, while strengthening the accountability of charities to the public.<\/p>\n

Publicly Funded Societies vs. Member-Funded Societies<\/strong><\/p>\n

The new Societies Act<\/em> distinguishes between publicly funded societies<\/em> and member-funded societies<\/em>. 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 <\/em>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.<\/p>\n

While the member-funded societies will enjoy a reduced regulatory burden under the new Act<\/em>, publicly funded societies will bear a greater regulatory burden through several new accountability measures.<\/p>\n\n\n\n\n\n\n\n\n
Publicly Funded Societies<\/strong><\/td>\nMember-Funded Societies<\/strong><\/td>\n<\/tr>\n
Charities and other entities that receive significant public funding<\/td>\nFunded primarily by its members to carry on activities for the benefit of its members<\/td>\n<\/tr>\n
Required to have 3 directors and at least one of the directors must be ordinarily resident in British Columbia<\/td>\nOnly required to have one director and none of the directors need be ordinarily resident in British Columbia<\/td>\n<\/tr>\n
Public access to financial statements must be provided upon request<\/td>\nDoes not apply to a member funded society<\/td>\n<\/tr>\n
A majority of the directors of a society must not be employees or contractors of the society<\/td>\nDoes not apply to a member funded society<\/td>\n<\/tr>\n
Required to disclose the remuneration paid to its directors and (up to) its 10 most highly remunerated employees and contractors<\/td>\nDoes not apply to a member funded society<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Corporate and Governance Procedures<\/strong><\/p>\n

The new Societies Act <\/em>also adopts specific corporate and governance procedures from British Columbia\u2019s Business Corporations Act <\/em>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]<\/a> at members\u2019 meetings,[vi]<\/a> reducing the threshold to pass a special resolution from 75 percent to two thirds,[vii]<\/a> and creating multiple classes of membership.<\/p>\n

Mandatory Online Filing<\/strong><\/p>\n

The new Act <\/em>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.<\/p>\n

Other Noteworthy Amendments to the Act<\/em><\/strong><\/p>\n

Other areas affected by the new Act<\/em> include:<\/p>\n