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The Canada Revenue Agency (“CRA”) has released information on the new B.C. Societies Act for B.C. societies that are registered charities (“Societies Act”). The Societies Act, which came into force on November 28, 2016, affects all societies created in B.C. Those that were created in B.C. before November 28, 2016 need to transition under the Societies Act by filing a transition application. If a society does not transition by November 28, 2018, it will be dissolved by the B.C. Corporate Registrar. This means it will cease to exist.
CRA advises that if a society that is registered as a charity ceases to exist as a society, it will no longer meet the requirements for charitable registration. As a result, its status as a registered charity could also be revoked.
In order to transition under the Societies Act, a society needs to complete the transition application. This requires filing online with the B.C. Corporate Registrar the following information:
- its name and purposes;
- a consolidated electronic version of the bylaws, plus all provisions from the previous constitution that were in addition to the name and purposes;
- whether or not it is becoming a member-funded society;
- directors’ names and addresses; and
- the registered address of the society.
The purposes of the society must be the current purposes from the society’s constitution filed with the B.C. Corporate Registry. The purposes cannot be amended in the transition application.
The bylaws that are filed are either the current bylaws filed with the B.C. Corporate Registry or revised bylaws, provided that any revisions have been approved by a special resolution of the members. Where the constitution had provisions that were in addition to the name and purposes, these must be moved to the bylaws. When moved to the bylaws, any “unalterable” provisions must now be marked to indicate that they were “previously unalterable”.
We recommend that societies obtain a transition package from the B.C. Corporate Registry which is a certified copy of their current constitution and bylaws. This will ensure that the society is filing the appropriate documents in its transition application. We also recommend that societies take this opportunity to review their bylaws to determine whether there are any inconsistencies between their bylaws and the Societies Act.
One of the questions in the transition application is whether the society has received approval from its members to become a member-funded society. Registered charities should be aware that they are prohibited from becoming member-funded societies under the Societies Act.
CRA has confirmed that once a society has transitioned, it needs to provide CRA’s Charities Directorate with the certified copies of the constitution and bylaws that are issued by the B.C. Corporate Registrar to the society. If a registered charity that is a B.C. society is going to make any changes to its constitution and bylaws, CRA has the right to review those changes in order to determine whether they are consistent with the requirements for charitable registration.
Miller Thomson’s Social Impact Group can assist societies with transitioning under the B.C. Societies Act.