Draft a Non-Profit Constitution (Societies Act FAQs): Difference between revisions
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{{REVIEWED | reviewer = [[Pacific Legal Education and Outreach Society]] (PLEO) in January 2024}} | |||
== | ==Constitution== | ||
A | ===What is a constitution?=== | ||
A non-profit’s constitution is one of the two foundational documents that are required in order for a non-profit to incorporate. The constitution sets out: | |||
* the name of the non-profit, and | |||
* the purposes of the non-profit. | |||
== | ===Can anything else be in the constitution?=== | ||
No. Only the name of the non-profit and the non-profit’s purposes can be in the constitution. Any other provisions, such as winding up and dissolution clauses, limits on membership, or office location, should be in the bylaws. | |||
===Can the constitution be changed?=== | |||
Yes. The non-profit can change the constitution by passing a special resolution at a meeting of members, such as an AGM or SGM. Once members have passed a special resolution, the non-profit must file a constitution amendment application through BC Societies Online. | |||
''Exception: if the non-profit was incorporated before the new ''Societies Act'' took effect on 28 November 2016 and has not yet transitioned, special rules apply when those non-profits transition to the new Act. See the [[Transition (Societies Act FAQs)|transition appendix]] for more information.'' | |||
==Name== | |||
===What can the non-profit be named?=== | |||
The name of the non-profit that is in the constitution must be one that was approved by the registrar. For more information on non-profit names, see the [[Choose a Non-Profit Name (Societies Act FAQs)|Choose a Name]] section. | |||
== | ==Purposes== | ||
===What purposes are allowed?=== | |||
The purposes of the non-profit determine what actions the non-profit can undertake and can include agricultural, artistic, benevolent, charitable, educational, environmental, patriotic, philanthropic, political, professional, recreational, religious, scientific, social or sporting purposes. Examples include a theatre company, a curling club, a daycare, and a youth treatment centre. Note that not all permitted non-profit purposes are charitable, which could cause issues if in the future the non-profit wishes to become a registered charity. For more on charitable purposes, see the [https://www.canada.ca/en/services/taxes/charities.html CRA Charities Directorate website]. | |||
===What purposes are not permitted?=== | |||
The non-profit may not state as its purpose the carrying on of a business for profit or private gain. In other words, the non-profit’s purpose can’t be to make money. | |||
However, this doesn’t prevent the non-profit from running a business, so long as the business proceeds go toward the non-profit purposes of the non-profit. For example, a seniors network might operate a thrift shop (a business), but all the proceeds go toward providing services and programming for seniors (the non-profit’s purpose). | |||
==(Optional) Member Funded Society Clause== | |||
Despite the rule that only permits the name and purposes in the non-profit's constitution, if a non-profit wishes to be a member funded society, the constitution must include a clause to that effect. | |||
== | |||
However, member funded society status is a unique status that must be considered very carefully. For more information, see the [[Member-Funded Societies (Societies Act FAQs)|Member-Funded Societies]] page. | |||
__NOGLOSSARY__ | |||
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Latest revision as of 22:30, 11 January 2024
| This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Pacific Legal Education and Outreach Society (PLEO) in January 2024. |
Constitution
What is a constitution?
A non-profit’s constitution is one of the two foundational documents that are required in order for a non-profit to incorporate. The constitution sets out:
- the name of the non-profit, and
- the purposes of the non-profit.
Can anything else be in the constitution?
No. Only the name of the non-profit and the non-profit’s purposes can be in the constitution. Any other provisions, such as winding up and dissolution clauses, limits on membership, or office location, should be in the bylaws.
Can the constitution be changed?
Yes. The non-profit can change the constitution by passing a special resolution at a meeting of members, such as an AGM or SGM. Once members have passed a special resolution, the non-profit must file a constitution amendment application through BC Societies Online.
Exception: if the non-profit was incorporated before the new Societies Act took effect on 28 November 2016 and has not yet transitioned, special rules apply when those non-profits transition to the new Act. See the transition appendix for more information.
Name
What can the non-profit be named?
The name of the non-profit that is in the constitution must be one that was approved by the registrar. For more information on non-profit names, see the Choose a Name section.
Purposes
What purposes are allowed?
The purposes of the non-profit determine what actions the non-profit can undertake and can include agricultural, artistic, benevolent, charitable, educational, environmental, patriotic, philanthropic, political, professional, recreational, religious, scientific, social or sporting purposes. Examples include a theatre company, a curling club, a daycare, and a youth treatment centre. Note that not all permitted non-profit purposes are charitable, which could cause issues if in the future the non-profit wishes to become a registered charity. For more on charitable purposes, see the CRA Charities Directorate website.
What purposes are not permitted?
The non-profit may not state as its purpose the carrying on of a business for profit or private gain. In other words, the non-profit’s purpose can’t be to make money.
However, this doesn’t prevent the non-profit from running a business, so long as the business proceeds go toward the non-profit purposes of the non-profit. For example, a seniors network might operate a thrift shop (a business), but all the proceeds go toward providing services and programming for seniors (the non-profit’s purpose).
(Optional) Member Funded Society Clause
Despite the rule that only permits the name and purposes in the non-profit's constitution, if a non-profit wishes to be a member funded society, the constitution must include a clause to that effect.
However, member funded society status is a unique status that must be considered very carefully. For more information, see the Member-Funded Societies page.
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