The New Societies Act is Coming: What It Means for Non-Profits in BC
The law governing societies in British Columbia is going to change dramatically this year. The new BC Societies Act (I'll be calling this the “New Act”) received royal assent on May 14, 2015 and will be coming into force on November 28, 2016 along with the Societies Regulation. The New Act will replace the current Society Act (the “Current Act”), which was enacted in 1977 and governs about 27,000 societies in British Columbia.
As a lawyer who works with several BC societies, I am thrilled to see this new legislation come into force because the New Act provides updated and modernized rules for the creation and governance of societies in British Columbia. Although the New Act maintains the basic framework of the Current Act, certain new elements were created to improve and simplify the way societies function while strengthening the transparency and accountability of charities to the public.
In our next three articles, we’ll give you the scoop on what societies will need to be prepared for when transitioning under the New Act and answer some of the questions you might have about the transition process.
In this month's post, we’ll talk about some preliminary thoughts: When and how do you “transition”? Will you need to change your bylaws? If so, when should you make those changes? In next month's post, we’ll get into the nuts and bolts of the changes a society may want to make to its bylaws. And in our final post, we’ll talk about a new concept created by the New Act: the difference between publicly-funded societies and member-funded societies.
How Do You "Transition" as a Society?
Once the New Act comes into force, pre-existing societies will be required to transition under the New Act within two years by filing a transition application containing:
1. a constitution and bylaws that meets the requirements of the transition application,
2. a statement of directors, and
3. a registered office of the society.
A society does not need to have member approval in order to file a transition application unless the society wishes to amend or replace its constitution or bylaws.
Will You Need to Change Your Bylaws?
The short answer is: It depends.
Any bylaws of a society that conflict with the New Act or the Regulation will be of no force and effect as of November 28, 2016. However, to avoid confusion, a society may wish to revise its bylaws to ensure that any such conflicts are removed.
The transition can also serve as an opportunity for existing societies to review and update their constitution and bylaws. There are various bylaws that a society may wish to adopt in order to take advantage of the New Act’s flexibility (e.g., regarding types of memberships, location of meetings, and methods of giving notice).
If a society wishes to adopt new bylaws or make changes to its bylaws, the new or altered bylaws must be approved by a special resolution of the members.
When Can You Change Your Bylaws?
Societies will have several opportunities to amend their bylaws (or replace them entirely). Here are the options:
1. Amend bylaws before the New Act comes into force (before November 28, 2016)
requires a special resolution with a 3/4 vote, and
requires a separate filing of the special resolution (under the Current Act) along with a $50 fee.
Note that once the New Act comes into force on November 28, 2016, a society will be unable to amend its bylaws until it transitions.
2. Amend bylaws on transition (on or after November 28, 2016)
requires a special resolution with a 2/3 vote (unless a higher threshold is expressly set out in the bylaws) or a 3/4 vote if the special resolution was passed before November 28, 2016, and
can be done as part of the Transition Application, so no separate filing or fee is involved.
The wrinkle here is that the New Act has done away with the concept of “unalterable” provisions. So, upon transition, any unalterable provisions set out in a society’s constitution are supposed to be moved to its bylaws without any changes and identified as “previously unalterable”. This means a society that adopts new bylaws on transition cannot change or delete any unalterable provisions that were in its constitution during the transition process. Only once the society has transitioned, can it then alter previously unalterable provisions through the New Act’s bylaw amendment procedure (which requires a separate filing along with a $50 fee).
3. Amend bylaws after transition
requires a special resolution with a 2/3 vote (unless a higher threshold is expressly set out in the bylaws), and
requires a separate filing (bylaw alteration application) along with a $50 fee.
These are just a few initial considerations to think about when a society is looking to transition under the new BC Societies Act. In our next article, we’ll get into the details of what you can—and can’t—change in your society’s bylaws. We’ll outline some of the new provisions you’ll see in the New Act and discuss what amendments you may want to consider in light of those legislative changes.