On October 28, 2021, Bill 19 – 2021: Societies Amendment Act, 2021 (“Bill 19”) received royal assent in British Columbia, introducing amendments to the Societies Act (British Columbia) (the “Act”). This post outlines some of the notable changes.
As at the date of this post, many of the amendments are not yet in force and will come into effect by regulation. The government of British Columbia has indicated that it will provide a notice period for upcoming changes.
Directors and Senior Managers
Bill 19 introduces the following changes in respect of a society’s directors or senior managers:
- Default Term: The default term for any director of a society will end at the close of the society’s next annual general meeting. This will apply even if the society’s bylaws do not specify when a director’s term ends. If a society wishes to have a different term length for its directors, it must be provided for in the society’s bylaws.
- Eligibility: Persons who were incapable of managing their own affairs but have since been found otherwise by a court will be able to serve as a director or senior manager.
- Disclosure of Interests: A director or senior manager is not required to disclose a conflict of interest if they were reasonably unaware of the conflict.
- Conflicted Person at Board Meetings: Any one director, or such greater number of directors set out in the society’s bylaws, will be able to ask a conflicted director or senior manager to remain at a board meeting to provide information.
- Directors’ Resolutions: Directors will only be able to pass a directors’ resolution without a meeting if a copy of the resolution is sent to all directors. As before, all directors, or such lesser number of directors set out in the society’s bylaws, must consent to the resolution.
- Proxy Voting: Directors may not vote by proxy at a meeting of directors.
Disclosure Rules for Employee Remuneration
Directors of a society are required to prepare and present financial statements to the members at each annual general meeting. A society was previously required to disclose in its financial statements the remuneration of its 10 most highly remunerated employees or contractors. Bill 19 will require societies to disclose in their financial statements the remuneration of all employees and contractors above a prescribed amount, currently $75,000.
Bill 19 introduces the following changes or clarifications in respect of general meetings:
- Meeting Minutes: Minutes must be kept for general meetings only, and not for other gatherings of members.
- Requisition Word Count: The word limit for a requisition of a general meeting by voting members is increased from 200 to 500 words.
- Notice of General Meeting Requirements: Notice of a general meeting will be required to include the date of the meeting, the time of the meeting, the location of the meeting (if applicable), and the text of any special resolution to be submitted at the meeting. If a general meeting will be an electronic meeting, the notice of the meeting will also be required to include instructions for attending and participating in the meeting by telephone or other communications medium, including instructions for voting at the meeting (if applicable).
- Alternative Forms of Notice: The threshold number of members required to permit a society to send a notice of a general meeting to members by email and by publication in a newspaper or the society’s website will be decreased from 250 members to 100 members.
- Proxy Votes: A voting member may not vote by proxy unless permitted by the bylaws.
- Member Proposals: The word limit for member proposals will be increased from 200 to 500 words. The member who submitted the proposal must be present at the meeting. The proposal must include any special resolution that may be required to be considered. A proposal does not need to be considered if it relates to a substantially same matter that was considered at a recent general meeting.
We previously reported that the government of British Columbia amended the Act to give societies the permanent ability to host fully or partially electronic meetings.
Bill 19 introduces the following changes or clarifications in respect of a society’s records:
- Register of Directors: The register of directors will be required to include the date that directors start and cease to be directors, in addition to directors’ names and contact information.
- Register of Members: The register of members must be organized by different classes of members, if any, and contain members’ names and contact information. No other information may be included in the register of members.
- Right to Inspection: If a society restricts members’ rights to inspect the register of members, restrictions on the use of the register also applies to copies of the register. In other words, a copy of the register of members can only be used to requisition or call general meetings, to submit members’ proposals, or to influence the voting of members.
- Corrections: A society will be required to file a notice of correction if it becomes aware of an error in its statement of directors and registered office. A person whose name is incorrectly included in a society’s statement of directors and registered office will be able to apply to have their name removed from the statement.
- Failure to Comply: If the society fails to file a proper record, the registrar sends a written request to the society to file a corrected record, and the society does not do so within 21 days, then the registrar may initiate the process to involuntarily dissolve the society.
Record Keeper Role for Dissolving Societies
A society that wishes to voluntarily dissolve must pass and file an ordinary resolution appointing a “record keeper”. If the society is dissolved by the registrar, this new role will be filled by the person who was the keeper of the records before the society’s dissolution.
The record keeper must maintain all of the society’s corporate records for three years after the society’s dissolution. The record keeper must provide access to the records to any person who is entitled to access under the Act.
Dissolving Pre-Existing Societies without a Transition Application
Many societies were incorporated before the Act came into force in 2016. These “pre-existing societies” were given two years to transition to the new legislation by filing a “transition application”. That deadline has now been extended to November 28, 2022.
If a society fails to file a transition application by the new deadline, the registrar may initiate the process to involuntarily dissolve the society. Normally, when the registrar begins the process to dissolve a society, the society can file an application for extension, which gives the society at least 6 more months to resolve the issue before dissolution. However, this exception explicitly does not apply to a failure to file a transition application.
Extraprovincial Non-Share Corporations
As before, a registered extraprovincial non-share corporation must file an annual report with the registrar in each calendar year. Bill 19 provides that this requirement does not apply in the calendar year in which the corporation is registered.
An extraprovincial non-share corporation must now reserve its own name if it is available for use in British Columbia. If it is not available for use, then the corporation must adopt an assumed name.
Bill 19 also introduces various provisions that will allow for the removal or resignation of an extraprovincial non-share corporation’s attorney.
If you have any questions regarding the amendments to the Act, please contact one of the lawyers in our Charities + Non Profit Group.