The new British Columbia Societies Act, which will come
into force on November 28, 2016, introduces a number of measures
aimed at promoting transparency and accountability. While these
measures are intended to promote both members' and donors'
confidence and trust, societies may find some of these measures,
like the requirement to report on remuneration, onerous and
Under the current British Columbia Society Act, the
directors of every society must present the financial statements to
the society's members at the annual general meeting. While this
obligation is continued under the new Act, the new Act includes a
new requirement for the financial statements to include a note
stating the remuneration paid by the society to its directors and
top ten highest paid employees and contractors who are paid at
least $75,000. In addition, under the new Act any person will be
able to request a copy of the financial statements of a society and
the society will have to provide a copy of the financial statements
to that person, on receipt of any required fee, regardless of
whether or not that person is a member or a director of the
These disclosure obligations do not apply to "member-funded
societies". A member funded society is a society that receives
funding from its members, is not a charity and for two of its most
recent financial years did not receive public or government funding
greater than $20,000 or 10% of the society's gross annual
income. In addition, during the two year transition period
immediately after the new Act comes into force, these disclosure
requirements will not apply to existing societies in British
While the note in the financial statements does not have to
include the name of the directors, employees and contractors whose
remuneration is being disclosed, existing societies in British
Columbia have expressed concern that it will be relatively easy to
determine who in the society is receiving the compensation
disclosed in the financial statements. This is particularly the
case for smaller societies with only a handful of employees or a
very small board of directors. In addition, the regulations which
were recently published will require that the disclosure on the
directors must include the position or title of each director.
Although this disclosure requirement is similar to that for
Community Contribution Companies in British Columbia, it is rather
unique compared to the other provincial and federal not-for-profit
legislation. The only other Canadian jurisdiction that requires
similar remuneration disclosure for not-for-profits is the
The requirement to disclose information on remuneration may be
sufficiently onerous that societies may be tempted to avoid the
application of the new Societies Act by leaving British
Columbia before the remuneration disclosure requirements come into
effect. Unfortunately, however, both the current British Columbia
Society Act and the new Societies Act do not
permit societies to continue into another jurisdiction. In
contrast, the Canada Not-for-profit Corporations Act and
the non-profit legislation in most other provincial jurisdictions
permit not-for-profits to continue into another jurisdiction.
Even without the ability to export out of the British Columbia
jurisdiction, many British Columbia societies may still be able to
effectively transfer their organization to another jurisdiction by
taking the following steps:
incorporate a new not-for-profit
entity in another jurisdiction;
if the society is a registered
charity, apply for charitable registration of the new entity;
transfer the society's assets to
the new entity; and
obtain extraprovincial registration
in British Columbia if the entity is continuing to carry out
activities in British Columbia.
In addition to considering the provisions of the applicable
legislation, a society wishing to move to another jurisdiction will
need to consider whether there are any restrictions in its
constitution and bylaws on the distribution of assets that will
prohibit the society's transfer of its assets.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
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.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).