Reviewing Your Non-profit Society's Bylaws

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Mary Childs, Michael Blatchford and Steve Carey in November 2016.

A non-profit society's bylaws set out the rules for governing and operating the society. When the new Societies Act became law on November 28, 2016, most existing societies had some bylaws that were inconsistent with the new Act. As of that date, those bylaws ceased to have effect. If you haven't yet had a chance to do so, conducting a review of your society's bylaws is highly recommended to harmonize them with the new Act. It also presents an opportunity to make positive organizational change.

Options for reviewing your bylaws

There are three ways to approach a review of your society's bylaws:

• Option 1: Revise your society's existing bylaws to align with the new Act.
• Option 2: Adopt the new model bylaws and revise them to fit your society's needs.
• Option 3: Undergo a detailed review of your society's vision and operations and use this opportunity to overhaul your bylaws.

The third option is the most ambitious. It also has the biggest payoff. You could think of it this way. Transitioning under the new Act presents an opportunity to do something that organizations rarely make time to do: take a detailed look at the organization’s governing documents and policies, and revise as needed to realize the organization's vision.

While the third option is encouraged, this guide focuses on the first two options, recognizing that many non-profits are constrained by time and resources.

Option 1: Revise your society's existing bylaws

This option features working through your society's current bylaws to consider whether provisions in the new Societies Act are at odds with the bylaws or offer options to adapt the bylaws to better fit your society's needs.

If your society currently uses the model bylaws under the old Society Act, they may not need radical changes. The old model bylaws, often called Schedule B bylaws because they appeared in Schedule B of the old Act, are for the most part compliant with the new Act. That said, there are a few clauses in the Schedule B model bylaws that are somewhat in tension with the new Act: two are highlighted in the discussion below on conducting a clause-by-clause analysis.

As well, other clauses in the Schedule B bylaws don't take advantage of the flexibility provided under new Act. For example, under the new Act a society’s directors have discretion to issue a debenture on borrowing funds, unless the bylaws restrict that discretion – which the Schedule B bylaws do, by requiring a special resolution of members to issue a debenture. So effectively that clause of the Schedule B bylaws curtails the flexibility introduced with the new Act.

For these reasons, even though those using the old Schedule B model bylaws may not need to make extensive changes, conducting a bylaw review is still recommended.

Alternatively, you could replace your bylaws with the new model bylaws, customizing them to your society's needs. Which brings us to option 2.

Option 2: Adopt the new model bylaws

An option available to societies with the introduction of the new Societies Act, instead of preparing a consolidated set of existing bylaws (with or without further revisions), is to adopt a new set of bylaws entirely. The new set could be the new model bylaws found in Schedule 1 of the Societies Regulation; a Word version is available through the Corporate Registry website.

These model bylaws contain basic clauses for governing and operating a society – such as the conduct of meetings and the role of directors – that align with the new Act.

The model bylaws may be a good option for societies with a small membership that need a very simple structure or societies that need a temporary solution.

It is not recommended to adopt the model bylaws straight out of the box. The model bylaws will likely need several changes to reflect the specific needs of your society. Below in the section on key clauses to consider are some comments on provisions in the model bylaws to have a particularly close look at in considering whether they are a good fit for your society.

Conducting a clause-by-clause analysis

Whether you are working from your society's existing bylaws or the new model bylaws, you should work through each clause with an eye to two factors:

• Step 1: Does the clause align with the new Act?
• Step 2: Does the clause support the needs of your society?

Example 1: Expelling a member

Let’s look at an example. Bylaws often include a clause dealing with expelling a member.

The relevant provision in the new Societies Act reads:

Discipline and expulsion of member

70(1) The bylaws of a society may provide for the discipline or expulsion, or both, of members.

(2) Unless the bylaws provide otherwise, a member of a society may be disciplined or expelled by special resolution.

(3) Before a member of a society is disciplined or expelled under subsection (2) or the bylaws, the society must

(a) send to the member written notice of the proposed discipline or expulsion, including reasons, and

(b) give the member a reasonable opportunity to make representations to the society respecting the proposed discipline or expulsion.

Let's assume the relevant provision in the society's existing bylaws was drawn from the old Schedule B model bylaws under the old Society Act, which read:

Part 2 – Membership

8(1) A member may be expelled by a special resolution of the members passed at a general meeting.

(2) The notice of special resolution for expulsion must be accompanied by a brief statement of the reasons for the proposed expulsion.

(3) The person who is the subject of the proposed resolution for expulsion must be given an opportunity to be heard at the general meeting before the special resolution is put to a vote.

The new model bylaws do not address the expulsion or discipline of a member.

Step 1: Does the clause align with the new Act?

The wording in the existing bylaws is similar but slightly different from provision in new Act. The bylaw deals only with expulsion; the new Act deals with expulsion and discipline. The bylaw provides the member with "an opportunity to be heard at the general meeting"; the new Act provides the member with "a reasonable opportunity to make representations to the society", which is broader wording, not restricted to the general meeting or to an opportunity to say something.

There's an argument to make that the existing bylaw and the Act don't fully conflict; that is, that the Act extends the wording of the bylaw. But to whatever extent that the existing bylaw and the Act are in conflict, the Act would prevail.

Step 2: Does the clause support the needs of your society?

The new Act provides that a member can be disciplined or expelled by special resolution unless the bylaws provide otherwise. Consider whether the needs of your society would be better met by having a different procedure, such as one involving a board of directors process.

If you are revising the existing bylaws, the options would be to:

• Delete the provision from the existing bylaws (and let the matter of expulsion or discipline of a member be governed by the provision in the Act).
• Revise the provision in the existing bylaws to provide a different procedure for dealing with expulsion or discipline of a member.

If you are working from the new model bylaws, the options would be to:

• Do nothing (and let the matter of expulsion or discipline of a member be governed by the provision in the Act).
• Add a provision outlining a different procedure for dealing with expulsion or discipline of a member.

Example 2: Quorum at general meetings

Let's look at a second example, dealing with quorum at general meetings.

The relevant provision in the new Societies Act reads:

Quorum

82(1) Subject to subsections (3) and (4), the quorum for the transaction of business at a general meeting is

(a) 3 voting members, unless paragraph (b) of this subsection applies, or

(b) if the bylaws provide for a quorum greater than 3 voting members, that quorum.

(2) The bylaws of a society may, for the purposes of subsection (1) (b), provide for a quorum that is greater than 3 voting members, by doing either of the following:

(a) specifying the number of voting members that constitutes a quorum;

(b) requiring that the quorum be calculated as a specified percentage of voting members or on another basis.

(3) If a society has fewer voting members than the quorum provided for in subsection (1), the quorum for the transaction of business at a general meeting is all of the voting members.

(4) The bylaws of a society may provide that if a general meeting is adjourned until a later date because a quorum is not present, and if, at the continuation of the adjourned meeting, a quorum is again not present, the voting members present constitute a quorum for the purposes of that meeting.

Let's say the provision in the society's existing bylaws was drawn from the old Schedule B model bylaws, and reads:

16 (3) A quorum is 3 members present or a greater number that the members may determine at a general meeting.

The provision in the new model bylaws reads:

3.7 The quorum for the transaction of business at a general meeting is 3 voting members or 10% of the voting members, whichever is greater.

Step 1: Does the clause align with the new Act?

There are some issues arising from the society's existing bylaws when read together with the relevant provision in the new Act:

• The existing bylaws refer to "members present". The provision in the new Act refers to "voting members".
• The provision in the new Act contemplates the bylaws specifying the number of voting members or requiring a calculation as a percentage of voting members or on another basis. Yet the existing bylaws say "or a greater number that the members may determine at a general meeting". That wording does not specify a number of voting members or a calculation. Which places the wording in the existing bylaws somewhat in tension with the wording of the new Act.

Step 2: Does the clause support the needs of your society?

Let's turn our attention to the quorum provision in the new model bylaws. The bylaw provides for a quorum of 3 voting members or 10% of voting members, whichever is greater. Consider whether 3 voting members is too few for your society, what percentage of voting members might be a good fit for your society, and whether a different mechanism to determine quorum (so long as it complied with the Act) would be preferable.

For example, for societies with larger memberships, 10% can be hard to achieve. For a society with 2,000 members, 10% is 200 people – a very large number to try to get out to an AGM. A higher fixed number and a lower percentage – say, 20 voting members or 2% of voting members – could be a better fit for a society of that size.

Key clauses to consider

This section covers some of the key clauses to consider in conducting a bylaw review. It is organized based on the parts in the new model bylaws. This list is not intended to be exhaustive, but rather to help you get started on your bylaw review.

Members

Transitioning an Existing Society: A How-to Guide for Non-profits in BC © Drew Jackson is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 2.5 Canada Licence.