Information about legal compliance Societies Act for non-profits in British Columbia.
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Section 20 Records (Societies Act)
Section 20 records are the official records a non-profit must keep, either in digital or paper format, under sections 20(1) and 20(2) of the Societies Act.
The section 20(1) records a non-profit must keep are:
Member Class
A member class is a group that shares the same rights and benefits once admitted as members.
An example of different classes of membership are voting members and non-voting members. Classes are not the same as categories such as 'platinum' or 'silver' with different benefits such as discount tickets. Rather, it relates specifically to the rights and benefits involved in the operation and governance of the non-profit.
Special Resolution
A special resolution is a vote that requires a super majority (usually 2/3) in favour of the vote for it to succeed.
A non-profit can amend its bylaws to raise the threshold for a special resolution up to 100%. However, one exception is that the threshold to remove a director must remain 2/3.
Ordinary Resolution
An ordinary resolution is a vote that requires a simple majority (50%+) in favour of the vote for it to succeed.
This usually happens when members vote at a general meeting. A simple majority of the voting members present must vote in favour of the motion for it to succeed. In addition, an ordinary resolution may be passed if agreed to in writing by 2/3 of the total voting members in the non-profit.
Most non-profit business that requires voting at a general meeting will be done through an ordinary resolution.
General Meeting
A general meeting is when members meet to discuss topics consequential to the overall direction of the non-profit. However, general meetings are not any meeting where members are present. The meeting must have been called for the stated purpose of holding a general meeting, and the notice requirements in section 77 of the Societies Act must be met.
Do your non-profit's financial statements disclose how much the non-profit remunerates its directors?
If a non-profit pays its directors for being a director (e.g. wages, honoraria, meeting fee), then the financial statements must disclose the amount. Directors cannot be remunerated unless the bylaws allow.
If the director is paid for services to the non-profit other than being a director, that also needs to be disclosed.
The non-profit can cover a director's expenses caused by being a director, such as travel to a meeting. That is considered reimbursement, not remuneration.
Does your non-profit know how to read financial statements?
Financial statements are a broad overview of the non-profit’s financial position, presented for member approval at each AGM.
Financial statements generally include four documents:
- Income Statement
- Balance Sheet (Statement of Financial Position)
- Statement of Cash Flows
- Equity Statement (Statement of Retained Earnings)
Does your non-profit file its Annual Report after every AGM?
An Annual Report states the date your non-profit held its Annual General Meeting. Your non-profit must file an Annual Report every year, within 30 days after your AGM is held.
If your non-profit fails to file an Annual Report two years in a row, the Registrar may take steps to dissolve your non-profit.
Your non-profit can file an Annual Report through YCOR. The fee for filing an Annual Report online is $25.
When your non-profit files an Annual Report, it can also update its directors and registered office.
Do your non-profit's bylaws require the use of Robert’s Rules of Order at meetings of members?
Robert's Rules of Order are a very popular set of rules for running meetings. If you've been at a meeting run by a chairperson that had moving, seconding, motions, and majority-rule votes, it's quite likely that meeting was run by Robert's Rules or a modified/simplified version of Robert's Rules.
If your non-profit's bylaws use the word “may” rather than “shall”, then your non-profit has more discretion on how to run the meeting. Most non-profits do not need to follow Robert’s Rules to have a productive meeting.