On November 28, 2016, British Columbia replaced its old Society Act with the new, modernized Societies Act, marking the first major change to the legislation since the 1970s. The new Act governs the diverse range of not-for-profit organizations and registered charities within BC, and it offers a variety of positive features providing greater flexibility in how societies operate. Below is a summary of what this means for your BC Society:
YOU WILL NEED TO “TRANSITION” UNDER THE NEW ACT
All current BC societies are required to file a “transition application” with the Corporate Registry. The transition must be completed within two years of the new Act coming into force. For these existing societies, it is time to make sure your society complies with the new Act! There are several mandatory changes that must be made to the constitution and bylaws while transitioning. It is not necessary to obtain member approval of these changes; however, if a society chooses to make additional changes to its bylaws (or, as some cases may be, to wholly repeal and replace bylaws with a brand-new version), this must be approved by special resolution to the members.
Before beginning the transition, it is essential that all annual reports be up to date and filed with the registry, or else a society will not be permitted to transition. All transitioning societies must also ensure that their current statement of Directors and Registered Office is complete and up to date.
It should be noted that if an existing society does not transition by November 28, 2018, it is at risk of being dissolved by the Registry. As such, we will be in touch with our clients in the coming months to discuss what is required in the transition process.
NEW INCORPORATIONS, ANNUAL REPORTS AND OTHER FILINGS CAN BE DONE ONLINE
The new Act is (at last!) based on an online system, BC Societies Online, which provides for electronic filings. The old system required paper filings to be made at the Corporate Registry, leading to delayed filing times. This updated system allows you to incorporate a new society almost instantly, as well as manage your current society’s filings in one place, thus clarifying record keeping and access to corporate records.
IN-PERSON AGMs NO LONGER MANDATORY
Many will breathe a sigh of relief to learn that the new Act now allows voting members to pass a unanimous resolution instead of holding an AGM. On a similar note, it also allows for directors’ resolutions to be passed without a meeting, and special resolutions of voting members by a 2/3 vote instead of a ¾ vote. On top of these new, more relaxed guidelines surrounding AGM’s and resolutions, the Societies Act allows the alteration of previously unalterable provisions within the constitution. Such provisions must be moved from a society’s constitution into its bylaws.
INCREASED DISCLOSURE OBLIGATIONS
The new Act features increased disclosure obligations for greater public transparency, including, but not limited to, public disclosure of remuneration of certain directors, employees and contractors.
“SENIOR MANAGERS” AND DIRECTORS MUST MEET SAME QUALIFICATION CRITERIA
The newly introduced concept of “senior managers” identifies one or more individuals appointed by the Board of Directors, who will in turn exercise delegated authority to manage the activities and internal affairs of the new society act bc either as a whole, or in respect of a principal unit of it. The Act also sets out very clear qualifications for directors and senior managers, and any director who does not meet these qualifications will be required to resign.
INTRODUCTION OF “MEMBER-FUNDED” SOCIETIES
Member-funded societies are another new concept that did not exist under the previous Act, offering relaxed governance rules to certain bc societies online that receive minimal public funding. For more information on member-funded societies, and to find out if it’s appropriate for you to become a member-funded society, check out our detailed information package found here.
FOR MORE INFORMATION:
The key points examined above cover only a minor portion of the amendments you will find in the new Act. To learn more, or to discuss how we can assist you with the transitioning process, please don’t hesitate to contact us at [email protected] or 604-629-5400