Introduction to Transitioning an Existing Society
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.