Local governments that are involved in or have incorporated societies should be aware that the new Societies Act, SBC 2015, c. 18 comes into force on November 28, 2016. The new Act modernizes how societies are established and governed, bringing them more closely into line with for-profit business corporations.
There are new conflict of interest provisions in the Act that both directors and officers of societies must familiarize themselves with. If there are any questions of whether or not a conflict may exist under these new provisions it is prudent to seek legal advice.
All pre-existing societies will be required to file a transition application under the new Act by November 28, 2018. While the transition process itself is simply a matter of consolidating the bylaws, and uploading a copy of the constitution and bylaws electronically into the new Registry system that is being implemented, there are some important things for societies and their members to be aware of during the transition process.
- The constitution must only contain the name and purposes of the society. If the current constitution contains unalterable clauses, such as those relating to disposition of assets on winding-up or remuneration of directors, these provisions will have to be moved to the bylaws as part of the transition application.
- Under the new Act, unalterable clauses will no longer be “unalterable”. On transition the new bylaws will note these provisions as having been “previously unalterable”; however, in future the membership will be permitted to change these provisions if they so choose.
- Other than as noted above, changes to the constitution are not permitted as part of the transition process. Changes may be made to the constitution prior to November 28, 2016 by passing a special resolution at an AGM or extraordinary general meeting, or by written consent of all of the members to the special resolution; changes cannot be made to any unalterable clauses at this stage. Alternatively, after the transition is complete the constitution may be changed following the procedures under the new Act.
- Bylaw changes are permitted as part of the transition application. In transition, a society is permitted to file either its existing bylaws, altered bylaws approved by a special resolution of the members, or an entirely new set of bylaws approved by special resolution of the members with the transition application. However, if unalterable clauses were previously in the constitution they must be moved into the bylaws as indicated above.
- Societies filing their existing bylaws or altered bylaws will be required to file a consolidated version of the bylaws. In preparation for the transition, now is a good time to create a consolidated version of the bylaws, if the society has not already done so.
The provisions of the new Act permitting a society to revise or replace its existing bylaws affords an excellent opportunity to review and update bylaws, which may have gone unchanged for many years. Under the new Act some provisions in the bylaws may be redundant or may conflict with provisions under the Act. A starting point is the model bylaws found in the “Societies Regulation” BC Reg. 216/2015, which can be customized to meet the needs of the individual society.
Whether changes to a society’s bylaws or constitution are made or not, all societies incorporated in British Columbia are required to transition under the new Act by November 28, 2018.