Corporate governance for some closely-held entities has evolved
to the point where much of the governance business is conducted by
unanimous written resolution. Governing legislation
usually starts with the presumption that a meeting is to occur, but
offers a statutory alternative of accomplishing the same tasks by
unanimous written consent resolution of the participants. As
a result, formal governance "meetings" of members
or directors of closely-held entities are held less often,
unless matters of controversy arise.
However, there is at least one set of circumstances in British
Columbia corporate governance where an organization must continue
to hold an actual meeting, and this requirement is sometimes
overlooked by those who just assume that in today's age written
resolutions are always acceptable to perform governance tasks.
Under the Society Act (British Columbia), a non-profit society
is required to hold an annual general meeting (AGM) of its
membership. While written consent resolutions may be used
for other member proceedings (including special
resolutions to alter the Constitution and Bylaws), at least once a
year the members must actually meet, to conduct the annual members
business. That business usually includes such items
as electing directors, receiving financial statements,
and appointing auditors (if applicable).
For many BC societies with a broad constituency membership (such
as golf clubs or industry associations) the task of assembling in
person once a year is appropriate and routine. However, for
certain other closely-held BC societies, often where there is no
broader membership (in essence, the only members are also the
directors), this formality is sometimes overlooked. There
must actually be a meeting for the AGM. Written resolutions
are not a valid substitute.
To complicate matters, the Society Act requires that the AGM
must be held in British Columbia, unless specific consent of the BC
Registrar is obtained to hold the AGM outside the province.
While in our experience such consents are routinely given when
applied for, it appears to be an administrative policy of the
Registrar that consents will only be given in advance of the
meeting date, and not after.
A society's bylaws can provide some partial relief if they
contain enabling provisions for participation in meetings by way of
proxy or by teleconference. However, if a society is working
with older governance documents which may not have been
updated recently, such relief may be absent and might be the
subject of further formalities to ensure the governance
requirements are met.
It is expected that BC's Society Act will be
updated through a law reform process in the next couple of
years. As part of that reform, the requirement to
actually hold a meeting for the AGM may be modified to permit
written consent resolutions as a governance alternative.
Until then, however, BC societies need to remember to meet ... in
person ... once a year.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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