Proposed Amendments to the Society Act (BC)
Davis LLP Corporate / Commercial Bulletin
Wednesday, 11 April 2012
The Society Act
The Society Act has not been substantially revised since 1977. In December, 2009, the Ministry of Finance (“Ministry”) commenced a review of the Act by asking for suggestions from stakeholders. The Ministry used this input to publish the Society Act Review Discussion Paper (“Discussion Paper”) in December, 2011. The Discussion Paper puts forward a number of proposed changes to regulation of societies that attempt to balance the comments of the stakeholders, and the desire for a modern legal framework with the need for a simple and accessible set of laws for not-for-profits.
The Discussion Paper invites further comments on reform to the Society Act, which must be received by April 30, 2012. Legislation to amend or replace the Act is targeted for 2013 at the earliest.
It is important to note that the proposals in the Discussion Paper are intended to stimulate discussion and further input, and do not reflect government policy or the views of the Ministry or the Legislature.
The Discussion Paper raises two fundamental framework issues. The first concerns what corporate law provisions ought to apply to societies. In this regard, the Discussion Paper suggests that select provisions of the British Columbia Business Corporations Act (BCA) ought to be imported into the current Society Act framework. The second issue is the extent to which the Society Act should contain regulatory provisions that constrain the operation of societies.
Importing the BCA into the Society Act
Generally, the Discussion Paper contemplates importing select provisions of the BCA into the current Society Act. The paper suggests changes that would bring the Society Act more in line with business corporate law while leaving out certain features of the BCA that would jeopardize the special nature of societies and the distinctive role that they play. Among the array of proposals are the following notable proposed changes:
Some features of the BCA that the Discussion Paper recommends should not to be adopted include:
Issue 2: Regulatory Provisions
The Discussion Paper poses for discussion the degree of regulatory control that ought to be imposed on societies in consideration of the trend of most ‘business corporate statutes’ to become non-regulatory. The key elements of this discussion are:
At this time, amendments to the Society Act have not been tabled for review by the legislature, and there is no information on how current societies will be expected to transition. However, it is likely that once changes are made to the Society Act, existing societies will need to make changes to their governing documents. Davis LLP will keep its clients apprised of changes as they develop and ensure that any future transition process will occur smoothly and without delay.