BC Proposes Tweaks To The Societies Act

The Societies Act (the “Act”) came into force on November 28, 2016 and all societies in B.C. were required to complete a transition under the Act by November 28, 2018. The new Act has now been in place for approximately two-and-a-half years, and the British Columbia Ministry of Finance (the “Ministry”) has announced proposed amendmentsThe thirty-six proposed amendments are summarized in this Appendix (PDF). The Ministry describes the purpose of the proposed amendments as follows:

  • maintain and enhance the user-friendliness of the Act
  • address ambiguities, omissions and inconsistencies within the Act and other legislation
  • streamline, update and refine processes, and
  • remove unnecessarily burdensome Corporate Registry filing requirements.

A majority of the 36 proposed amendments appear to accomplish housekeeping goals such as providing increased clarity. The Ministry is encouraging societies and their members and directors, the legal community and the public to comment on the proposed amendments. However, the Ministry has stated that only comments regarding the listed amendments will be considered and no responses will be provided.

The deadline for feedback is August 23, 2019. Feedback can be e-mailed  to Societies.Consultation@gov.bc.ca or mailed to the Ministry:

Financial and Corporate Sector Policy Branch Ministry of Finance

PO Box 9418 Stn Prov Govt

Victoria BC V8W 9V1

 

De Jager Volkenant will be providing a submission to the Ministry and welcomes any questions or comments to info@dejagervolkenant.com.

Proposed Amendments

The following proposed amendments may be of interest to societies:

1. General Meetings – a society may have informal gatherings without the need to follow the society’s notice requirements.

 

2. Directors’ Term of Office – if directors have no specified term of office, the bylaws must set out how the directors cease to hold office.

 

3., 5. & 6. Register of Directors – a society must maintain a register of directors with the name and contact information of each director, along with the date on which the person became or ceased to be a director.  The public will have access to the register of directors, but can only use the contact information for purposes related to the society’s affairs.
Comment: This proposed amendment allows members of the public to have access to current and former directors’ contact information; however, it is unclear what constitutes “contact information”.  No matter what form of contact information is provided, this amendment creates an opportunity for former members and the general public to contact directors, as long as the purpose of the contact relates to the society’s internal affairs. It is easy to imagine a scenario where the contact information of directors is abused. If the amendments pass, directors should be careful to choose what contact information they provide to the society for the register of directors.

 

3. Register of Members – a society must maintain a register of members with the name of each member and the date on which each person became a member. To protect the privacy of members, the register of members must not contain any other information.
Comment: The proposed amendment states that the register of members must contain no other information to protect the privacy of members. However, the Act currently requires the register of members to include the contact information provided by the member and this requirement is not removed by the proposed amendment. Without the removal of the contact information, this amendment does not address the privacy concerns members and societies have regarding the release of member contact information.

 

8. Remuneration reporting requirements – remove the option to allow a society to report only the 10 most highly paid employees or contractors (whose remuneration is $75,000 or more) and instead requires a report for the remuneration paid to all employees and contractors who receive $75,000 or more.
Comment:  This amendment does little to increase transparency and accountability, and in our opinion does not take into account the diversity of the 27,000 societies in B.C. There are other more effective ways to increase transparency around remuneration including adopting the Canada Revenue Agency (“CRA”) reporting standards for the remuneration of employees of charities.  CRA requires a charity to list the ten highest compensated, permanent, full-time employees in compensation bands ranging from $39,999 to $350,000 and over. This method of disclosing compensation will provide a better picture of the compensation paid by the society, especially given that many B.C. societies do not have more than one employee making $75,000 or more.  For example, if a society has six employees making $70,000 the society would not have to disclose this information under the Act or the proposed amendments. However, based on CRA’s reporting requirements, the society would have to disclose that it has six employees making between $40,000 and $79,999.

 

12. Director Meetings – directors may pass a directors’ resolution without a meeting and without all the directors being present if allowed by the bylaws and if the resolution has been sent to all the directors. The proposed amendment also requires that the bylaws have notice requirements for passing a directors’ resolution without a meeting and prohibits anyone from acting for an absent director (i.e. no proxy voting for directors).

 

17. & 19. Refine requirements for requisition and members’ proposals – increases the word limit from 200 to 500 words for a requisition and a members’ proposal, and clarifies the process.

 

18.  Refine requirements for giving notice of a general meeting – societies are allowed to publicly post notice of a general meeting if they have 100 members, instead of the current requirement of 250 members.

 

34. & 35. Transition application – confirms that transition applications filed after the transition deadline are still valid and adds that the registrar may dissolve a society for failing to file a transition application.
Comment: A number of societies have not yet completed a transition application. These amendments recognize that and also indicate that the B.C. Registry is slowly taking steps towards dissolving societies that have failed to transition. If your society has not yet transitioned please contact us.

 

The Ministry is taking a positive step in reviewing the Act and making some amendments, and we hope the Ministry will thoughtfully consider the feedback provided by societies and other stakeholders.

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