On November 23, 2015, by Order in Council No. 673, the new British Columbia Societies Act was proclaimed as coming into force on November 28, 2016. The new Societies Act replaces the current Society Act and modernizes the rules for the creation and governance of societies in British Columbia. It also places more emphasis on the transparency and accountability of societies. In a previous issue of this Newsletter, we reported on the significant changes that the new Societies Act will bring.
Transition of Pre-Existing Societies
Existing societies will have to transition under the new Act within two years after November 28, 2016. In order to transition, societies must file an application containing a constitution and bylaws. After November 28, 2016, pre-existing societies will be prohibited from altering their bylaws or amalgamating with other societies prior to transitioning.
The Order in Council also published the new Societies Regulation which will also come into force on November 28, 2016. The regulations set out further requirements with which BC societies will need to comply.
Member-Funded Societies versus Charities and Publicly Funded Societies
The new Act treats “member-funded societies” differently from charities and publicly funded societies. TheSocieties Regulation prescribes the threshold for what disqualifies a society from being a member-funded society. Specifically, a society will not be considered a member-funded society if, for the past two financial years, the society received public donations, government funding, or a combination of the two, in an amount greater than $20,000 or 10% of the society’s gross income during that period.
The Societies Regulation further prohibits the following societies from being member-funded societies:
- societies that received loans or grants from the British Columbia Housing Management Commission;
- societies that were service providers under the Community Living Authority Act; and
- societies that are authorities under the Independent School Act and received a grant under that Act for the previous school year.
Reporting on Director and Employee Remuneration
As we previously reported, the Societies Act requires charities and publicly funded societies to disclose in their financial statements how much remuneration they pay to directors (whether they are paid as directors or in another capacity) and the top ten highest paid employees and contractors. Although there is no requirement to disclose the names of the relevant directors, the Societies Regulation requires the financial statements to state the directors' titles or positions. The regulations also set the threshold at which employee and contractor remuneration must be disclosed for the financial period. This threshold is $75,000.
The new Act permits pre-existing societies to remove or alter their unalterable provisions. However, pursuant to the Societies Regulation, some pre-existing societies are not permitted to remove unalterable provisions without the consent of a designated minister. These include certain specific societies along with the following classes of societies:
- pre-existing societies that are designated recipients in relation to a designated accommodation area under the Provincial Sales Tax Act;
- pre-existing societies that received certain money or property from the British Columbia Housing Management Commission; and
- pre-existing societies that hold a licence to operate a community care facility under the Community Care and Assisted Living Act and have received certain money or property from a regional health board.
Like the existing Society Act, societies will have the option of creating their own customizable bylaws or adopting the model bylaws set out in the new regulations. The latter option provides societies with a cost-effective way of updating their bylaws to accord with the new Act. Upon transition, pre-existing societies that have adopted the model bylaws set out in Schedule B to the current Society Act should consider adopting the modernized model bylaws set out in Schedule 1 to the new Societies Regulation.
Other Significant Items
Additional provisions set out in the Societies Regulation include:
- the naming requirements for societies and extraprovincial non-share corporations registered in British Columbia;
- the fees for inspecting and copying records;
- the ability for societies to have directors or senior managers who are 16 or 17 years of age, provided the society’s bylaws permit it and a majority of its directors are at least 18 years of age; and
- the $50/day fine applicable to unregistered extraprovincial non-share corporations that carry on activities in British Columbia.
The Order in Council No. 673 is available on the Queen’s Printer British Columbia website.