The new Act will provide greater
flexibility by permitting societies to
keep their records in any format that
enables the records to be inspected
and copied. It will also allow for
different people to have different
inspection rights.
Public disclosure of remuneration
The new Act will require societies to disclose the remuneration, if any, paid to its directors and
to its 10 highest-paid employees and contractors earning over a prescribed amount. This disclosure will have to be made in a note to the society’s annual financial statements, which will be
accessible to both the society’s members and the general public. To counterbalance any privacy
concerns, the names of the directors, employees, and contractors will not have to be included in
the financial statements. Note: The requirements to disclose remuneration information and make
financial statements accessible to the public are not applicable to member-funded societies.
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•
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Tax flow-through vehicle
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Audited financial statements
7.24%*
1 year return
7.68%*
5 year return
*annual yield, compounded quarterly
www.firstcircle.ca
38 CPABC in Focus • Sept/Oct 2015
Inspection of records
The new Act will clearly set out the recordkeeping obligations of a society by outlining
the records that must be maintained and
identifying the individuals who may inspect
them. A society will not be obligated to keep
a record if 10 years have passed since it was
last altered or created and if the record is no
longer “relevant.”
Aligning with British Columbia’s current
corporate legislation, the new Act will provide greater flexibility by permitting a society
to keep its records in any format that enables
them to be inspected and copied. The new
Act will also allow for different people to have
different inspection rights; for example, directors may inspect all records without restriction, but a society’s bylaws may restrict
members from inspecting certain records.
Director’s conflicts of interest
Under the current Society Act, a director must
disclose any interest in a proposed contract
to the other directors; otherwise they could
become liable to account for any profits made
under the contract. The new Act, however, will
clarify that the disclosure obligation applies
to any actual or proposed contracts or transactions in which a director has a “material”
interest (including a non-pecuniary interest).
Under the new Act, the requisite disclosure
of a director will have to be documented in
the minutes of a directors’ meeting, in a
written consent resolution, or in any other
written document addressed and mailed to
the society’s directors.
Finally, the new Act will also prescribe that
a director-in-conflict must: abstain from
voting on (or consenting to, in the case of a
consent resolution) a resolution of directors
in respect of the matter; physically leave the
directors’ meeting while the matter is being
voted on or discussed (unless asked by the
other directors to be present to provide information); and refrain from any other action intended to influence the other
directors’ discussion or vote.
The transition period
Once it comes into force, the new Act will
contemplate a two-year transition period
during which existing societies will be expected to take steps to move to the new Act.