The Societies Amendment Act, 2021 (“Bill 19”) has received Royal Assent on October 28, 2021, amending certain provisions of the Societies Act. The amendments clear up some uncertainties that have arisen in the years since the Act was implemented.
The following are the major amendments that are currently in force (as of October 28, 2021):
- A society is only required to keep record of minutes of general meetings (Section 20(1)(i)). Previously the wording implied that a society was required to keep record of all meetings of the society, whether formal or informal.
- Individuals who inspect a register of members may only use the information from the inspection, or a copy made of the register, in connection with matters related to the activities or internal affairs of the society (Section 25(7)).
- Individuals who inspect the register of directors may only use the information from the inspection, or a copy made of the register, in connection with certain matters related to the society, being (Section 27.1):
- the requisitioning or calling of a general meeting
- the submission of a member proposal
- the calling of a general meeting, or
- an effort to influence the voting of members.
- A director or senior manager is now only required to disclose a conflict of interest that they know or that they reasonably ought to have known about (Section 56(1), Section 62(1)). The previous version of the Societies Act simply stated the requirement for disclosure of a conflict of interest applied whether or not a director or senior manager was aware of this.
- The word limit for the business to be considered at a general meeting requisitioned by a member has been increased from 200 words to 500 words and the notice of the general meeting must include such statement of business, including the text of any special resolution to be considered (Section 75(3)(c) and (4)(b)). The 200 word limit was far too low to provide a useful summary of the matters to be considered at a requisitioned meeting.
- A voting member of a society may not appoint a proxy holder unless permitted by the bylaws
Most of the major changes to the Societies Act from Bill 19 have yet to be enacted and will come into force by regulation as a result of Bill 19. The following is a summary of the major provisions that will come into force in the near future as a result of Bill 19:
- A director or senior manager who is conflicted out of decision will still be allowed to remain in a meeting for the purpose of providing information if asked to do so by one other director or some other number determined in the bylaws.
- Directors appointed without a term of office will be deemed to be appointed until the close of the next annual general meeting after such appointment unless the bylaws state otherwise.
- In order to pass a directors resolution without a meeting, a copy of the resolution will need to be sent to the directors and all of the directors, or a lesser number as outlined in the bylaws, must consent to such resolution.
- Directors will not be permitted to vote by proxy at a meeting of directors and, as such, will also be prohibited from appointing alternate directors. This is consistent with case law around requiring directors (not members) to act personally.
- Society Registers
- The register of directors will have to include the start and end date of such director’s term.
- The register of members will only be allowed to include the name and contact information of each member and their class of membership.
- Statement of Directors and Registered Office
- Societies will be required to file a notice of correction if there is an error in the statement of directors and registered office.
- A process will be introduced to allow individuals to apply to have their name removed from a statement of directors if it is included in error.
- Member Meetings
- If a society has 100 members a notice of general meeting may be sent by email to every member along with publishing it in a newspaper or posting it on their website, if permitted by the bylaws. This will add more flexibility to notice requirements.
- Member-funded Societies
- A member-funded society will be allowed to receive a testamentary disposition from a former member, director or senior manager (or a relative of one of these) without losing their member-funded status. This amendment seems reasonable, and probably arose from a particular member-funded society facing this issue.
Overall, the amendments provide additional clarity for societies, particularly around the scope of personal information that can be disclosed and used during society disputes. We will provide a further update once there is an update on when these additional changes will come into force.
If you have any questions about the above changes to the Societies Act, please contact one of our lawyers for assistance.