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Preparing to Transition Under the New Societies Act (B.C)

 

Written by Krystin Kempton, Associate. 

The new Societies Act comes into force on November 28, 2016. All societies in British Columbia will have two years to transition under the Societies Act or face dissolution. To transition, a society must submit a transition application, which contains the society’s updated constitution and bylaws (as prescribed by the Societies Act and described below) along with a statement of its directors and registered offices.  The Society will need to consider whether to identify itself as a “member funded” society, as discussed below. The transition application is submitted online through the BC Registry Services website.

Constitution and Bylaws under the new Societies Act

The content of a society’s constitution will be limited under the Societies Act. Each society will need to prepare a version of its constitution that consists of nothing but the society’s existing name and purposes, word for word as it appears in the society’s constitution on file with the Corporate Registry. Any provisions of the existing constitution other than the society’s name and purposes must be relocated to the society’s bylaws.

The society will need to prepare a complete set of its existing bylaws in consolidated form, including any amendments to the original bylaws that have been filed with the Corporate Registry. The provisions of the constitution, other than the society’s name and purpose, must also be added to the bylaws, without alteration. Any provisions from the constitution currently identified “unalterable” for a society must now be identified as “previously unalterable”.

Alternatively, a society may wish to prepare a new set of bylaws – either adopting the standard form of bylaws under the Societies Act or tailoring the standard bylaws to fit the needs of the society. Preparing to transition is a good opportunity to clarify or refine provisions. However, if the society adopts new bylaws on transition, it cannot change or delete any of the “unalterable provisions” that were in its constitution. Those must be added in, without alteration, to the new bylaws and identified as having been “previously unalterable”. Once the society has transitioned, it can then alter previously unalterable provisions by complying with the Societies Act bylaw amendment procedures.

Procedure for Transitioning

A society does not need to have a general meeting and a vote in order to reorganize its constitution and bylaws if it is simply moving provisions from the constitution to its bylaws, marking certain provisions as having been previously unalterable, and consolidating its bylaws.

If the society adopts new bylaws or amends its bylaws (other than adding the provisions shifted from its constitution and marking them as previously unalterable, or consolidating its bylaws), the members of the society must approve the bylaws or the bylaw amendments by a special resolution. What constitutes a special resolution will vary depending on the society’s bylaws.

In the transition application, the society will be asked whether it wishes to designate itself as a “member funded society” by including a statement to that effect in its constitution. A member funded society is funded primarily by its members to carry on activities for the benefit of its members (i.e., sports clubs, golf courses and professional associations). Member funded societies have modified standards applicable to them under the Societies Act. The members of the society need to authorize this designation by a special resolution.

Finally, the directors and registered office information must be updated. The society must also be up to date with annual reporting in order to transition.

There is no filing fee payable to transition under the Societies Act.

Categories: Business

 

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