I’m asked a lot about the “previously unalterable” provisions: those sections of a society’s constitution which must be moved into the bylaws and may be altered by a special resolution of the membership after the society transitions. But some societies are not at liberty to change these, at least not without ministerial permission. Others may put their funding or charitable status at risk if they modernize their bylaws.
The new Societies Act requires all pre-existing societies to transition before November 26, 2018, otherwise, the society may be dissolved by the BC Corporate Registry. Transition is the process of moving all clauses from the prior constitution other than its name and purposes to the bylaws, filing a PDF or Word document format version of a society’s bylaws, and onboarding to a new online system called “Societies Online” (see s.240 Societies Act).
On transition, any provisions from the society’s pre-transition constitution must be marked as being previously unalterable (see s.240(2)(b)(iii) Societies Act). The BC Corporate Registry guidance suggests this be done by stating exactly at the end of the previously unalterable provision “This provision was previously unalterable.”
Any special resolution passed before the date of the electronic transition filing which purports to change these “unalterables” will not be accepted for filing and will be of no force or effect (see s.4, Societies Transition Interim Regulation; see also new changes to the Act). After the transition filing, these provisions may be changed by special resolution as a standard bylaw alteration, subject to the process set out in the bylaws.
MINISTERIAL OVERSIGHT OF REGULATED SOCIETIES
However, certain pre-existing societies are subject to ministerial review before a bylaw change, or risk having their responsible minister order them to revert to their former constitution and/or bylaws. These include, as set out in the Societies Regulation:
- designated recipients as defined in section 1 of the Provincial Sales Tax Act;
- societies that are receiving or have received, from the British Columbia Housing Management Commission, money or other property;
- societies that hold a licence to operate a community care facility under the Community Care and Assisted Living Act and that are receiving or have received, from a board as defined in section 1 of the Health Authorities Act, money or other property;
- The Irving K. Barber British Columbia Scholarship Society;
- Habitat Conservation Trust Foundation;
- Freshwater Fisheries Society of B.C.; and
- B.C. Forest Genetics Society.
Even with this provision, the membership does have the ability to change previously unalterable clauses by special resolution; however, the responsible minister has the discretion to order the society to revert. Any changes to the previously unalterables should first be approved by the responsible minister, to avoid this situation.
GAMING AND CHARITABLE STATUS
Changes to previously unalterables may also affect a society’s funding agreements or its charitable status. At present, both BC Gaming and the Canada Revenue Agency have provided guidance through the BC Registries to the effect that so long as the previously unalterables remain unchanged, they will not re-examine ongoing funding agreements or charitable purposes.
Societies who wish to modernize their bylaws or purposes would do well to consult a charities or not-for-profit lawyer before undertaking such a change, in order to ensure the changes do not affect the society’s ability to operate or retain its charitable status.
Photo by Andrew Raun. Used under a Creative Commons license. No changes were made to this image.