Canada: Important Changes For BC Societies Taking Effect In May 2023

This past weekend, parts of British Columbia were as hot as 27 degrees—a first for 2023. But springlike weather wasn't the only change greeting British Columbians at the end of a dreary April. The Government of BC announced that new changes to the Societies Act will take effect this month, affecting more than 30,000 BC societies.

You might recall the Societies Amendment Act, 2021, which received Royal Assent on October 28, 2021. It amends the Societies Act in stages. Some amendments took effect in October 2021. A year and a half later, Victoria announced that the remaining changes will take effect in May 2023.

We have summarized these changes and added our own comments (in italics) below:

• Directors' Terms of Office (s. 11(1)) – Unless the bylaws say otherwise, directors without a term of office will cease to hold office at the end of the first annual general meeting after becoming a director. Bylaws that do not set out term limits for directors should be changed if a society does not want a director's term to end automatically at the end of the next AGM and if the society prefers longer term limits.
• Directors' and Members' Information (s. 20(1)(e) and (h)) – Registers of directors must provide information about when a director starts and ceases to be a director. Registers of members can only contain a member's name, contact information, and class of membership (if any). All societies should review their current registers, add the required the term information for directors, and remove any unnecessary information for members.
• Notice for Records Available for Pick-up (s. 29) – If the bylaws say that a society may send a record by making that record available for pick-up, the society must notify the intended recipient.
• Employee Remuneration Disclosure (s. 36(1)(b)) – Societies will need to disclose the remuneration of any employee or contractor exceeding the prescribed amount (currently $75,000). This change applies to financial statements that are prepared for annual general meetings held one year after this requirement takes effect.
• Errors in the Statement of Directors and Registered Office (ss. 51 and new 51.1) – Societies must file a notice of correction with the registrar if they become aware of an error in their statement of directors and registered office. Any person claiming not to be a director may also apply to the registrar to remove their name from a statement of directors and registered office.
• Directors' Meetings (s. 54) – Directors can pass a directors' resolution without a meeting if a copy of the resolution is sent to all the directors and all the directors (or a lesser number, if the bylaws say so) consent to the resolution in writing or in any other manner that the bylaws provide. Directors will not be able to vote by proxy at directors' meetings. Any current bylaw that allows for proxy voting by directors at directors' meetings will be of no force and effect and should be removed or amended. A society could also consider updating its bylaws to codify the requirement to circulate a written resolution among all directors in circumstances where all directors wish to pass a written resolution rather than have a meeting.
• Conflicted Persons at Meetings (ss. 56 and 62) – Directors and senior managers who are in a conflict can remain in a meeting to provide information so long as one director, or a greater number if the bylaws so require, requests that they remain. The Act previously required all other directors to consent to a conflicted person remaining at the meeting. If your society's bylaws or policies governing conflicts reflect these previous rules, it may be time for an update.
• Member Threshold for Email Notices (s. 77) – Societies with at least 101 members can give notice to members of a general meeting by email and by posting the notice in a newspaper or website, should their bylaws allow (the threshold was previously 251). The email only needs to be sent to members for whom the society has an email address in the register of members. Societies with at least 101 members could consider updating their bylaws to take advantage of this simplified notice procedure.
• Content of Notice of General Meeting (s. 78) – Notices of general meetings must be written and contain the meeting's date and time and, if applicable, the location, and any special resolution being submitted to the meeting.
• Members' Proposals (s. 81) – Members' proposals (i) must contain the names of and be signed by not fewer than the number of voting members that meet the society's proposal threshold (generally being 5% of voting members or less than 5% if the bylaws specify); (ii) must include any special resolution required to be considered; and (iii) together with any supporting statement, cannot exceed 500 words (the previous limit was 200 words; societies with bylaws that contain this previous limit will need to update those bylaws). One of the voting members who submitted the proposal must be allowed to present the proposal personally at the annual general meeting where the proposal will be discussed; however, the society does not need to consider a proposal relating to substantially the same matter that was considered at a recent general meeting.
• Record Keeper (new s. 122.1) – Any society seeking to dissolve voluntarily must appoint a "record keeper" by ordinary resolution of its members. The record keeper must keep and maintain the society's corporate records for three years after the society dissolves and provide access to the records for inspection and copying during such time. The record keeper is appointed by an ordinary resolution of the members before the society dissolves. Societies planning to dissolve in or after May 2023 should be aware of the record keeper requirement.
• Restorations (ss. 158 and 159) – Limited restorations of a society can be extended for longer time periods or converted to full restorations.
• Attorney Filings (new ss. 170.1 and 170.2) – An extraprovincial non-share corporation can remove an attorney by filing a notice with the registrar. A resigning attorney must give the resignation to the corporation at least two months before the resignation takes effect and file a notice of resignation with the registrar.
• Member-funded Societies and Gifts on Death (s. 190) – Member-funded societies can receive a testamentary gift (g., a gift on death by will, trust or beneficiary designation) from a current or former voting member, director, senior manager, employee, or a relative of these individuals without losing or jeopardizing their member-funded society status. Member-funded societies, which voting members primarily fund, have limits on how much they can receive each year from public donations. The new rules provide some relief and certainty to member-funded societies that receive gifts involuntarily as a result of the deaths of certain persons.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.