The constitution may need to be rearranged
As part of the transition process, your society’s constitution may need to be rearranged — carefully.
On transition, your constitution must consist of only the society’s name and purposes — which cannot be changed.
The Corporate Registry requires that any provisions in a society’s constitution other than the name or purposes of the society must be moved to the society’s bylaws. For example, a society may have a provision in its constitution about remuneration of board members or about the disposition of its assets on dissolution. These provisions must be moved to the bylaws on transition.
If the constitution has “unalterable provisions”
Many societies have constitutional provisions that are designated as “unalterable” — that is, provisions that can’t be changed. For example, a society may have a provision restricting its activities to a certain geographic area, and have designated that provision as unalterable. Or at the request of a funder, a society may have designated as unalterable a provision dealing with disposition of its assets on dissolution.
On transition, any such “unalterable” provisions in a society’s constitution — other than the name or purposes of the society — must be moved to the society’s bylaws, and must be identified as having been “previously unalterable”. These provisions cannot be changed on transition.
For further details, including an example of how this requirement can be handled, see our guidance on preparing for transition.
Changing “previously unalterable provisions”
Once a society has transitioned, any previously unalterable provisions that have been moved to the society’s bylaws can be altered by a special resolution of members. Unless the society’s bylaws provide for a higher voting threshold, a special resolution requires 2/3 of votes cast at a members’ meeting.
The result is that after transition, for many societies, a previously unalterable provision could be changed by 2/3 of those voting.
Flexibility in the new Act relating to special resolutions can be used to offset this result. In its bylaws, a society can provide a higher voting threshold of up to 100% of voting members. The higher threshold can apply generally or be set for specific special resolutions. After transition, a society could choose to require a threshold of 100% of voting members to change a bylaw provision that was previously unalterable. The society could at the same time choose to retain the default threshold of 2/3 of the votes cast for other bylaw amendments.
Finally, note that certain societies will need the written consent of government officials to alter previously unalterable provisions. These societies include:
- recipients of sales tax or other government revenue
- recipients of loans or grants from BC Housing
- community care facility service providers
Some societies have unalterable provisions in their constitution in order to preserve the charitable status of the society. If you have any doubt about whether making changes to previously unalterable provisions will adversely affect the society’s charitable status, you should seek legal advice.