{"id":23633,"date":"2016-10-28T10:12:42","date_gmt":"2016-10-28T14:12:42","guid":{"rendered":"https:\/\/www.cccc.org\/news_blogs\/?p=23633"},"modified":"2016-10-31T11:43:15","modified_gmt":"2016-10-31T15:43:15","slug":"one-month-until-the-new-bc-societies-act","status":"publish","type":"post","link":"https:\/\/cccc.org\/news_blogs\/legal\/2016\/10\/28\/one-month-until-the-new-bc-societies-act\/","title":{"rendered":"One month until the New BC Societies Act"},"content":{"rendered":"

Authored by Philip Milley, Associate Director of Legal Affairs<\/em><\/p>\n

The new British Columbia\u00a0Societies Act<\/em>\u00a0(the “Act<\/em>“) will replace the current\u00a0Society Act\u00a0<\/em>on November 28, 2016. While it is, in many ways, similar to the outgoing\u00a0Society Act,\u00a0<\/em>it also introduces a number of new changes. Some of the key changes have been reviewed in previous Noteworthy blog posts and can be found\u00a0here<\/a>\u00a0and\u00a0here<\/a>.<\/p>\n

Organizations currently incorporated under the\u00a0BC<\/em>\u00a0Society Act\u00a0<\/em>will be required to transition under\u00a0the Societies Act<\/em>\u00a0by\u00a0November 28, 2018. Failure to transition by this time will allow\u00a0the registry to dissolve the\u00a0society. Prior to\u00a0transitioning, societies must\u00a0have\u00a0their filings up to date.<\/p>\n

As part of this transition process, a society must file with the registry its constitution and by-laws, including any amendments online. Certified copies of the society’s original constitution, by-laws, and special resolutions are available from the Registry in a transition package for a fee of $40. This transition package is aimed to assist societies with transition and is available here<\/a>. It is important to note that is it not a requirement that\u00a0societies order this\u00a0transition package.<\/p>\n

The numerous changes to the legislation can be reviewed at the BC Registry Services pages located here<\/a> and here<\/a>. While the changes are\u00a0too numerous\u00a0to list, some of the noteworthy changes that become effective on November 28, 2016 include:<\/p>\n

Unalterable Provisions<\/h6>\n

Under the new Act<\/em> unalterable provisions will no longer be permitted in corporate documents. Provisions that were previously ‘unalterable’ will now be subject to\u00a0amendment in accordance with the Act<\/em>. A society that adopts new bylaws on transition cannot change or delete any unalterable provisions that were in its constitution. These provisions must be transitioned under the new Act<\/em> and be identified as ‘previously unalterable’. Once transitioned, a society can\u00a0then alter those provisions by complying with the appropriate amendment procedure.<\/p>\n

Publicly-Funded vs Member-Funded Societies<\/h6>\n

The new Act<\/em> distinguishes between\u00a0publicly-funded societies<\/em>\u00a0and\u00a0member-funded societies<\/em>. Publicly funded societies include organizations\u00a0such as charities and others 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. A variety of societies are\u00a0prohibited<\/em>\u00a0from being member-funded societies, including\u00a0registered charities and societies authorized under the\u00a0Independent School Act<\/em>\u00a0and have received a grant for the previous school year.<\/p>\n

Director Requirements<\/h6>\n

The Act<\/em> requires publicly-funded societies, including registered charities, to have a minimum of three directors, at least one of whom is ordinarily resident in British Columbia. The Act<\/em>\u00a0prescribes director qualifications but\u00a0expressly allows societies to impose additional qualifications in their by-laws. \u00a0The Act <\/em>requires that directors who do not meet the qualifications, either under the Act<\/em> or under a society\u2019s by-laws, must resign.Directors and senior managers will be obliged to disclose to the directors all material interests in matters that may conflict with their duties to the society<\/p>\n

Membership Provisions<\/h6>\n

The previous Act<\/em> required five members for incorporation and three members thereafter; however, the Act<\/em>\u00a0permits\u00a0a society to incorporate\u00a0with as few as one person. The Act<\/em> also permits\u00a0different membership classes and allows different rights and obligations to apply to each class.<\/p>\n

Governance\/Annual General Meeting and Resolutions<\/h6>\n

The Act<\/em> allows a society\u2019s annual general meetings to be carried out by\u00a0written consent instead of in-person meetings\u00a0and to provide\u00a0electronic notice of participation in meetings. The threshold for approving a special resolution has been reduced from 75% of votes cast to the lesser\u00a066% of votes cast. However, a higher voting threshold for\u00a0special resolutions can be established in the by-laws. Special resolutions will\u00a0become effective immediately and will not need to be filed prior to becoming effective.<\/p>\n

Financial Statements<\/h6>\n

Applicable Nov. 28, 2016 financial statements issued by a publicly-funded\u00a0<\/em>society must include\u00a0a note setting out remuneration paid to its directors, in all capacities, and its 10 highest paid employees and contractors on its financial statements prepared after Nov. 28, 2016. Only those employees and contractors that are paid in excess of\u00a0$75,000 must be noted. In addition, a\u00a0society must set out the details respecting any financial assistance given outside of the ordinary course of its activities such as loans or guarantees.<\/p>\n

Borrowing Powers<\/h6>\n

A further\u00a0change in the Act<\/em>\u00a0relates to the borrowing powers of societies and applies to all societies as of November 28, 2016, whether or not they have transitioned. The previous\u00a0Act<\/em> had restricted a\u00a0society from borrowing unless authorization by a special resolution, which required approval by at least 75% of the society\u2019s voting members, was received. The borrowing powers under the\u00a0Act<\/em>\u00a0gives the directors the general power to authorize a society to borrow money, subject only to any restrictions or prohibitions in the society\u2019s by-laws.<\/p>\n

Corporate Record Requirements<\/h6>\n

Finally, the Act<\/em> clarifies the corporate record-keeping and access requirements for societies. Section 20 of the Act <\/em>prescribes the records that must be kept and include, among others:<\/p>\n