(Updated April 23, 2020 at 2:00 PM)
Update: All companies, societies, co-operatives now able to meet electronically
New provincial orders now allow all BC companies, societies and co-operatives to hold electronic meetings. On April 21, 2020, Mike Farnworth, Minister of Public Safety and Solicitor General, issued a ministerial order pursuant to the Emergency Program Act (the “Order”), which allows companies, societies and co-ops to hold electronic meetings during the Province’s current state of emergency. Many of these organizations were already able to hold electronic meetings, but the Order address those whose bylaws were silent on electronic meetings or even prohibited them.
A summary of meeting mechanisms for societies and not-for-profit corporations can be found in the original article posted below.
The Order will remain in effect until the provincial state of emergency expires (currently set for end of day on April 28, 2020, but likely to be extended) or is cancelled. The Order specifically overrides any requirements under the Business Corporations Act, Societies Act and Cooperative Association Act that prohibit electronic meetings, including a corporation’s own articles, bylaws or rules. As a result, even if a society’s bylaws expressly prohibit holding a meeting by electronic means, the society is now allowed to hold an electronic meeting.
The Order provides the following important details which apply despite anything to the contrary in a society’s bylaws:
- A person who is entitled to participate in a meeting may now do so by telephone, video conference or “other communications medium” if all of the persons participating in the meeting are able to communicate with each other and, if applicable, vote at the meeting.
- A meeting may be held solely by telephone or video conference if:
- notice of the meeting provides instructions for attending at or participating in the meeting including instructions for how to vote at the meeting,
- all of the persons participating are able to communicate with each other and, if applicable, vote on resolutions, and
- the society facilitates the technology to host the meeting.
- If a meeting is held by telephone or video conference:
- the meeting is not required to have a physical location,
- notice of the meeting is not required to specify a location, and
- the meeting is deemed to be held in British Columbia.
- A person who participates in, or attends or votes at, a meeting by telephone or video conference is deemed to be present in person at the meeting.
In summary, every BC society is now allowed to hold a meeting, including an annual general meeting, by electronic means. The society is responsible for setting-up the meeting and sending members instructions on how to participate. The society must also facilitate the meeting by ensuring that all participants can communicate with each other and vote during the meeting. Finally, the society is still required to comply with other standard meeting requirements including notice, quorum, voting, etc.
This article should not serve as a substitute for legal advice. Our team is actively advising clients on responding to these issues. If your organization needs assistance with assessing your bylaws or with any other specific legal advice regarding the meeting options available to your organization, please contact us.
(Original article posted March 13, 2020 at 12:00 PM)
As organizations continue to navigate the challenges of COVID-19, societies and not-for-profit corporations may be concerned about upcoming meetings. Although the provincial and federal governments have not restricted large public gatherings, health officials are urging social distancing.
Both the British Columbia Societies Act and the Canada Not-for-profit Corporations Act provide meeting options for societies and not-for-profit corporations that can help protect the health and safety of their members, directors and other stakeholders, including participation in meetings by electronic means.
Participation by Electronic Means under the British Columbia Societies Act
The British Columbia Societies Act by default permits a society to hold meetings and allow participation in meetings by “telephone or other communications medium” unless the bylaws of the society provide otherwise. If the society’s bylaws do not restrict the use of electronic means, the society may hold its meetings of members, including the annual general meeting, by telephone or another communications medium (Skype, Zoom, etc.) provided that:
1. all the participants can communicate with each other; and
2. if any votes are conducted, they must be conducted in a way that adequately discloses the intentions of the members.
The requirements for notice and quorum under the society’s bylaws and the Societies Act for in-person meetings apply to meetings held by electronic means. Any electronic means can be used as long as the requirements around communication and voting are met.
For board meetings, the Societies Act states that unless the bylaws of a society provide otherwise, the directors may meet at any location, on any notice and in any manner convenient to the directors.
Participation by Electronic Means under the Canada Not-for-profit Corporations Act
The Canada Not-for-profit Corporations Act (CNCA) also addresses participation in meetings of members by electronic means but is less flexible than the Societies Act.
For federally-incorporated not-for-profit corporations, the CNCA allows participation in meetings by electronic means but distinguishes between persons participating in a meeting by electronic means and meetings being held entirely by electronic means.
Where an in-person meeting of the members is called, the CNCA by default permits a person to participate in the meeting by electronic means if the corporation has made the option available, unless the bylaws of the corporation provide otherwise. Persons participating by electronic means are deemed to be present at the meeting.
The CNCA, however, by default does not allow for a meeting of members to be held entirely by electronic means unless the corporation’s bylaws allow it.
In either case, the electronic means must permit all participants to communicate with each other. Votes may also be taken electronically if the electronic means that is used “enables the vote to be gathered in a manner that permits its subsequent verification” and “permits the tallied vote to be presented to the corporation without it being possible for the corporation to identify how the person voted.” The need for secret ballots would appear to bar voice votes during a telephone meeting (the default here is different from the default on in-person meetings).
The requirements for notice and quorum under the corporation’s bylaws and the CNCA for in-person meetings apply to meetings held in whole or in part by electronic means. Any electronic means can be used as long as the requirements around communication and voting are met.
If electronic means are not an option because of restrictive bylaws or equipment and technology challenges, there may be other options to help mitigate the risks posed by COVID-19. The availability of options depends on the organization’s bylaws and whether the organization is governed by the Societies Act or the CNCA. These options may include the use of written consent resolutions, deemed annual general meetings, proxy or absentee voting, or postponing a meeting altogether.
For board meetings, the CNCA allows the directors of a corporation to participate in a board meeting by electronic means, subject to the bylaws and if all the directors of the corporation consent.
Societies and not-for-profit corporations that are concerned about holding in-person meetings of members should review their bylaws and the governing legislation and, if permitted, consider holding meetings in whole or in part by electronic means. By reviewing these documents and making use of the available options, societies and not-for-profit corporations can encourage social distancing and mitigate the risks of COVID-19 to their members, directors and other stakeholders.
Our team is actively advising clients on responding to these issues. If your organization needs assistance with assessing your bylaws or with any other specific legal advice regarding the meeting options available to your organization, please contact us.
For updates and advice from the federal government regarding COVID-19, please see Health Canada’s website here.
For updates and advice from the provincial government regarding COVID-19, please see the BC Centre for Disease Control’s website here.