BC Not-for-Profit Alert: New Societies Act Coming!
By Michael Blatchford and Bryan Millman
T
Michael Blatchford is a lawyer
with Vancouver-based law
firm Bull Housser, working in
the firm’s charities and
tax-exempt organizations
group.
he provincial legislation that governs the majority of not-for-profits in British Columbia is receiving an overhaul.
The current Society Act dates from 1977, and while outdated in some respects, it remains the legislation of
choice for the incorporation of not-for-profit corporations in BC. The creation of the new Societies Act (“the
new Act”) was driven by a growing need to modernize the regulatory scheme governing societies in BC. The new Act
received royal assent at the BC legislature on May 14, 2015, but will likely not come into force until sometime in 2016.
What follows is a brief summary of some of the most significant features of the new Act. Note: A not-for-profit operating
in BC that is not incorporated under the current Society Act will not be affected by these changes.
Qualifications of directors
The new Act will establish minimum qualifications for all directors of societies. Directors must:
• Be at least 18 years old (with the possibility of exception by regulation);
• Not be declared incapable of a court;
• Not be an undischarged bankrupt; and
• Have no unpardoned convictions for fraud or certain other prescribed offences in the past five years.
A society is free to set out additional qualifications in its bylaws. A person who does not meet all criteria cannot be
elected or appointed as a director of a society, and a director who ceases to meet these qualifications must resign. The
new Act will also allow for “ex officio” directors—that is, directors who become directors because of a particular attribute/
position they have/hold, and not as a result of an election.
Bryan Millman practises within
the wealth preservation group
at Bull Housser, with a primary
focus in the areas of charities
and tax-exempt organizations.
Unalterable provisions and special resolutions
Most societies are well aware that the current threshold to pass a special resolution at a meeting is three-quarters of the
votes cast. The new Act will reduce this threshold to two-thirds. The new Act will also allow a society to set a higher
threshold for special resolutions—up to unanimous approval!
This flexibility may help offset the fact that the new Act will prohibit societies from having unalterable provisions in
their constitutions. When a society transitions to the new Act, it will have to move any unalterable provisions from its
constitution to its bylaws, where the provisions will become alterable. Under the new Act, the only recourse for a society
that wishes to make certain provisions more resistant to change will be to expressly set a higher-than-normal threshold
to amend these provisions.
Member proposals
Members of a society have always been able to requisition a special meeting for a specific purpose, provided that at least
10% sign the requisition. The new Act will add to this ability by giving members the right to add specific issues to the
agenda of an existing members’ meeting via a “member proposal.” This member proposal must be added to the agenda
if it is signed by at least 5% of the society’s voting members. A society’s board of directors will only have the discretion
to reject the proposal if it is substantially similar to an issue that was already proposed at an annual general meeting in
the previous two years. However, the new Act will provide that the Society is not held liable as a result of publishing a
proposal if required.
36 CPABC in Focus • Sept/Oct 2015