Introduction to Transitioning an Existing Society

Hi Elena, See the email I just sent about working on the page that I set up earlier. Thx! Drew

If you work at a non-profit society in British Columbia or sit on a board of directors, the new Societies Act affects your world as of November 28, 2016. Here are 10 changes in the new Act that you should know about:

1. There is greater access to a society’s records

Under the new Societies Act, members have greater access to a society’s records. The Act spells out the records a society must keep, including a register of members, minutes of members’ and directors’ meetings, accounting records, and financial statements.

By default under the Act, members are entitled to inspect all records of the society (as are directors). For some records, member access can be restricted. For example, a society’s bylaws can restrict members’ access to accounting records.

The public is entitled to receive a copy of a society’s financial statements and auditor’s report if requested. A society can choose to grant access to the public to more of its records. The only record that is excluded from public accessibility is the society’s register of members.

Records a society must keep include these records (this list is not exhaustive)	Director access	Member access	Public access
Register of members	Yes	Yes, though directors may restrict	No
Minutes of members’ meetings and copies of all ordinary and special resolutions	Yes	Yes	Bylaws may permit
Minutes of directors’ meetings and copies of all consent resolutions of directors	Yes	Yes, though bylaws may restrict (except relating to conflicts disclosures)	Bylaws may permit
Any disclosures by directors or senior managers of a conflict of interest	Yes	Yes	Bylaws may permit
Accounting records, including a record of each transaction materially affecting the society’s financial position	Yes	Yes, though bylaws may restrict	Bylaws may permit
Financial statements and any auditor’s report on the financial statements	Yes	Yes	Yes

2. Remuneration paid to directors and certain employees and contractors must be disclosed

Under the new Act, a society must disclose any remuneration paid to a director. Remuneration is money or other compensation paid for work or services performed. Amounts paid to a director for being a director and for acting in any other capacity must be disclosed separately. The disclosure must be made in a note to the annual financial statements, which are available to society members and to the public.

(In a change that takes effect in 2018, a society must not remunerate a director for being a director unless the bylaws expressly permit; see below.)

As well, societies must disclose the remuneration of any employees or contractors making over $75,000. If a society has more than 10 employees or contractors making over that amount, they must disclose the top 10.

To counterbalance privacy concerns, the names of the directors, employees and contractors need not be included in the financial statements. The disclosure can be done by position or contract; individual names don’t have to be disclosed. As well, a society can pool the information by disclosing the total number of employees and contractors making over $75,000 and the total amount of remuneration paid to them.

3. There is greater flexibility in conducting members’ meetings

The new Act provides greater flexibility in conducting members’ meetings. Participating by telephone or other communications media is recognized as the norm. Unless a society’s bylaws provide otherwise, members can participate in meetings by phone or using other technology so long as all the people participating are able to communicate with each other.

An annual general meeting can now be held entirely in writing. All voting members must consent to a written resolution covering the matters that must be dealt with at the AGM, including the presentation of the financial statements and any auditor’s report.

4. The voting threshold for a special resolution has been lowered

The new Societies Act lowers the voting threshold for approving a special resolution. A special resolution approved by a society’s members is required to make fundamental changes to a society, including changing its name or bylaws.

Under the old Society Act, a special resolution required at least 3/4 of votes cast at a members’ meeting in order to be approved. Under the new Act, a special resolution requires 2/3 of the votes cast.

The new Act also allows societies flexibility in setting a higher threshold for special resolutions if they choose. In its bylaws, a society can provide a threshold of up to 100% of voting members. The higher threshold can apply generally or be set for specific special resolutions. For example, the bylaws can require a unanimous vote to change the bylaw that sets out where the society’s assets are to go on dissolution, while retaining the default threshold of 2/3 of the votes cast for other bylaw amendments.

5. Members now have the right to bring a “member’s proposal”

Members of a society have always been able to requisition a member’s meeting for a specific purpose, provided that at least 10% of voting members sign the requisition. The new Act introduces a right for members to add specific issues to the agenda of an annual general meeting. A member proposal must be added to the agenda if the proposal is signed by at least 5% of the society’s voting members. The proposal must be received by the society at least 7 days before notice of the AGM is sent.

A society’s board of directors have the discretion to reject the proposal if it is substantially similar to an issue that has already been voted on at a member’s meeting in the previous two years.

6. Members have more remedies

Under the new Act, members are able to apply to court for a remedy if the society’s activities are oppressive or unfairly prejudicial to one or more members. In applying for such an oppression remedy, a member will need to show they had a reasonable expectation to be treated in a certain way. They will also need to show that the society’s conduct was burdensome, harsh and wrongful, or had an unjust and inequitable effect on them.

If a member’s oppression claim succeeds, the court has wide discretion to make things right, including by directing or prohibiting any act, removing or appointing a director, varying a transaction or a resolution, directing compensation, or appointing an investigator.

Also under the new Act, members may bring a derivative action. In such an action, a member can enforce rights of the society when the directors refuse to act.

Under the old Divorce Act, the schedule of a parent's time with their children under an order or agreement, replaced with "parenting time" and "contact" in the new Divorce Act. Access usually referred to the schedule of the parent with the least amount of time with the child. See "contact," "custody" and "parenting time."

In law, failing to do something which is either optional or mandatory, such as failing to respond to an application or to a claim within the time limits set out in the rules of court. See "default judgment."

(1) Agreement, or (2) the giving of permission for a thing to happen or not happen.

A step in a court proceeding in which each party advises the other of the documents in their possession which relate to the issues in the court proceeding and produces copies of any documents the other side requests before trial. This process is regulated by the rules of court, which put each party under an ongoing obligation to continue to advise the other of new documents coming into their possession or control. The purpose of this step is to encourage the settlement of court proceedings and to prevent a party from springing new evidence on the other party at trial.

An agreement between two or more people, giving them obligations towards each other that can be enforced in court. A valid contract must be offered by one person and accepted by the other, and some form of payment or other thing of value must generally be exchanged between the parties to the contract.

A mandatory direction of the court that is binding and enforceable upon the parties to a court proceeding. An "interim order" is a temporary order made following the hearing of an interim application. A "final order" is a permanent order, made following the trial of the court proceeding or the parties' settlement, following which the only recourse open to a dissatisfied party is to appeal. Failing to abide by the terms of an order may constitute contempt of court. See "appeal," "consent order," "contempt of court," "decision" and "declaration."

(1) The assertion of a legal right to an order or to a thing; (2) the remedy or relief sought by a party to a court proceeding.

(1) Intentionally doing a thing, or (2) a law passed by a government, also called "legislation" or a "statute." See "regulations."

A court proceeding in which one party sues another for a specific remedy or relief, also called a "lawsuit" or a "case." An action for divorce, for example, is a court proceeding in which the claimant sues the respondent for the relief of a divorce order.