In 2021, following public consultations with stakeholders, the British Columbia government introduced an assortment of changes to the Societies Act with the goal to increase transparency and flexibility for societies and to protect the information of society members. We reported on these changes in detail in our bulletin New Amendments to the Societies Act – A Potpourri of Changes. The amendments are being implemented in stages.
The remaining changes came into effect on May 4, 2023. Here are highlights of key changes affecting British Columbia societies:
Information in Registers of Members and Directors
- The register of members each society is required to maintain, may only set out a member’s name, contact information and, if applicable, their member class.
- Similarly, the register of directors must set out, going forward, the dates a person became and ceased to be a director.
Member Meetings, Requisitions and Member Proposals
- The new amendments clarify that societies must only keep minutes of general meetings and not other (informal) member gatherings.
- For societies with many members, bylaws may permit sending notices of meetings by email to every member for whom the society has an email address as long as the notice is also published by newspaper and posted on a website maintained by or on behalf of a society. The threshold for such simplified notice procedure will be reduced from 250 to 100 members.
- The word limits for general meeting requisitions by members will be increased from 200 to 500 words.
- Going forward, member proposals to be considered at annual general meetings will have a word limit of 500 words, must include the text of any special resolution that is proposed for consideration and one of the members making the proposal must be permitted to present the proposal personally at the annual general meeting.
Changes Affecting Directors and Senior Managers
- Individuals who are incapable of managing their own affairs cannot serve as directors. On regaining capacity, such individuals may in future again act as directors.
- If a society’s bylaws do not set a term of office for directors, their term will end at the next annual meeting after becoming a director.
- The Societies Act has now clarified that directors cannot appoint proxies for board meetings.
- Boards may pass resolutions without a meeting by consent. The process for doing so has been clarified. Before the resolution is adopted (by all directors or the number of directors specified in the bylaws), it must be sent to all directors.
- Directors and senior managers only need to disclose conflicts of interests if they know or reasonably ought to have known of the conflict.
- Conflicted directors and senior managers must leave board meetings when the matter from which the conflict arises is under discussion or being voted on. In the past, the board could ask a director or senior manager to remain in the meeting to provide information. In the future, it is sufficient for one director to make such a request unless the bylaws set a higher threshold.
Disclosure of Employee Remuneration
- At present, societies must disclose in their financial statements, the remuneration of their 10 most highly paid employees and contractors. Going forward, the financial statements must show the remuneration of all employees and contractors over an amount set by regulation (currently C$75,000). The expanded reporting requirement will apply to financial statements presented to members at annual general meetings more than one year after the amendment comes into force.
Dissolution and Restoration of Societies
- Societies that dissolve voluntarily must appoint a “record keeper” to maintain their corporate records following dissolution in, or for inspection in, British Columbia. New access rules will govern matters such as notice period, reasonable time limits on access and fees.
- Following dissolution, societies can be restored for a limited time or fully. Going forward, limited restorations can be extended for longer periods or converted to full restorations without any time limit.
Testamentary Gifts to Member-funded Societies
In 2016, the Societies Act introduced the new class of “member-funded societies”. These societies are funded primarily by their members and are permitted by their constitutions to carry on activities for the benefit of their members. On dissolution, they may also distribute their property to their members (see our bulletin: A New BC Advantage: Member-funded Societies under the Societies Act).
- In future, member-funded societies can receive testamentary dispositions from a former member, director, or senior manager or a relative of these individuals for certain time periods without losing their member-funded status.
Next Steps – What Societies Can Consider to Comply with the Changes
The new amendments to the Societies Act will likely affect the bylaws and corporate records of many British Columbia societies. In particular, bylaws, to the extent they are inconsistent with these legislative changes, will be ineffective. Accordingly, the steps societies can take to ensure compliance include the following:
- Review, and if necessary, amend their bylaws:
- Do the bylaws set out term limits for all directors or could director terms inadvertently end at the next annual general meeting?
- If the bylaws contain provisions on member requisitions and member proposals, do they need to be updated?
- If the bylaws contain provisions permitting simplified notice by email, do they need to be changed to reduce the threshold for using such bylaws? If a society has more than 100 members, should it change the bylaws to permit the simplified notice process?
- Remove any provisions permitting directors to vote by proxy at board meetings.
- Consider updating provisions relating to director consent resolution to ensure they provide for the prior circulation of proposed board resolutions.
- Consider updating provisions in the bylaws relating to director and senior manager conflicts of interest.
- Consider updating bylaw provisions relating to director qualifications and incapacity.
- Review and update registers of members to remove any prohibited member information.
- Review and update registers of directors to add director start and end dates.
- Prepare for the disclosure of expanded employee and contractor remuneration information in the society’s financial statements.
Further Information or Questions
If you have any questions about the new amendments and their impact on your society or need assistance in reviewing your society’s bylaws or preparing a register of members, please contact Dierk Ullrich.
