BC Act

The new BC Societies Act has been announced to come into force on November 28th, 2016 and will replace the old BC Society Act. All societies that were incorporated under the old Act will have two years to transition and comply with the new Act.

Perhaps the biggest change for BC sport organizations is that they may be considered “member-funded societies” depending on if they receive less than a specific amount of funding from external sources (public donations and/or government funding). The amount is $20,000 or 10% of the organization’s gross revenue – whichever number is greater.

Importantly, a member-funded society is not required to disclose financial statements to the public or disclose remuneration for Directors or employees – which are both requirements of the new Act. It’s expected that many provincial sport organizations (PSOs) may end up being “public-funded societies” due to the revenue they receive from the provincial government; whereas clubs and local sport organizations may be “member-funded societies”. We’ve written more about the distinction in a December 2015 blogpost.

Here is a list of some of the important issues that will be relevant for sport organizations in BC:

Constitution. Current constitutions include a name, statement of purpose, statement of activities, a statement of non-profit, and a statement about dissolution. Under the new Act, everything except for the name and statement of purpose must be moved to the bylaws. Member-funded societies will be required to add a formal statement about being a member-funded society which must read:

This society is a member-funded society. It is funded primarily by its members to carry on activities for the benefit of its members. On its liquidation or dissolution, this society may distribute its money and other property to its members.

Special resolutions. Currently, special resolutions require 3/4th of the votes cast. In the new Act, a special resolution will require only 2/3rd of the votes cast.

Non-voting members. Currently, non-voting members are allowed but they must not outnumber the voting members. In the new Act, the limitation on non-voting members is removed.

Voting for Directors – The new Act permits a unique arrangement where a society can assign voting rights to elect a specific Director to only members with a certain categorization. For example, members who categorized as athletes can be the only members permitted to vote for an ‘Athlete Director’.

Member AGM proposals. Currently, societies are not required to accept member-proposed agenda items at an AGM. In the new Act, members are permitted to propose an agenda item (such as a bylaws amendment) provided it is signed by 5% of the voting members and is not overly similar to a previous proposal.

AGM. Currently, an AGM must be held within 15 months of the previous AGM. Under the new Act, an AGM must be held once in a calendar year – regardless of how close it is to the previous AGM.

Directors’ and officers’ qualifications. Currently, it is not required that Directors and Officers have minimum requirements for their position (such as being 18 years old). In the new Act, basic minimum qualifications are required.

Public access. Societies will be required to submit specific information to the government which will be available in a database accessible to the public. Societies that are “public-funded” will need to submit more information. The following documents will be accessible:

  • Constitution and bylaws
  • Annual reports
  • Director’s registrar
  • Registered address
  • Financial statements (publicly-funded society)
  • Remuneration for Directors (publicly-funded society)
  • Remuneration for staff and contractors if greater than $75,000 (publically funded society)[1]

Access to meeting minutes and financial statements. Under the new Act, members may inspect minutes of any meeting of the members, minutes from any meeting of the Board, and records of any transaction materially affecting the financial position of the society. However, the society’s bylaws may prohibit members’ access to minutes of meetings of the Board and to financial transaction records.

Remedies. The new act provides members with options for remedies if the Directors are operating the society “in a manner oppressive to the member” or if a resolution proposed or passed was “unfairly prejudicial to the member”. An order from the court can be sought to enact any number of remedies from to appointing an investigator, to invaliding a resolution, to removing a Director.

Conflict of Interest. Conflict of interest is strictly defined in the new Act and Directors who have a conflict of potential conflict must disclose it, abstain from voting on the issue, leave the meeting while it is being discussed, and not try to influence other Directors. A Director who does not follow these instructions will be required to “pay to the society an amount equal to any profit made by the Director” that occurred as a result of the conflict (unless the members decided otherwise, by special resolution).

 

Additionally, the new Act provides for the default form of some items which may be modified in the bylaws. For example, ten percent (10%) of members may still requisition a special meeting of the members – but this number may be lowered in the bylaws. Also, if a society’s bylaws are silent on the issue of proxy voting, then proxy voting is not permitted. But a society can decide to permit proxy voting and include it in their bylaws.

We will update this page regularly with new information and archive our writings on the topic below. BC organizations may also be able to learn lessons from the governance restructuring that was completed at the federal level and that is ongoing in Ontario.

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[1] Names can be omitted. But roles and titles must be used.

 

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