How to manage society complaints or wrongdoings

You may decide you want to try to resolve matters yourself before reaching out to a lawyer or going to court. There are ways to hold a society accountable.

Become a member

If you have concerns about the affairs of a society, become a voting member so you can vote to affect change. You will need to:

• check the society’s bylaws to see if there are any qualifications for membership; and
• make sure you can join a voting class of membership.

What members can do to influence a society.

• Vote to elect board members, usually at an annual general meeting (AGM).
• Request general meetings.
• Ask that an accountant attend a general meeting.
• Propose an item for the agenda at an AGM or other general meeting.
• Propose a special resolution.
• Access records.
• Vote to require that a society get a financial review from an accountant.

Members are also entitled to see the financial statements of a society at each AGM. In some societies, members need to vote to approve the financial statements at an AGM. This might be a policy or the bylaws might require it.

Check a society’s records

You may want to check the society’s records to:

• find more information;
• understand how decisions were made; or
• determine if any wrongdoings took place.

 Members and non-members can request records like:

• bylaws;
• a list of members or directors;
• records of disclosures of conflict of interest;
• the minutes of general meetings;
• copies of ordinary or special resolutions;
• financial statements;
• board meeting minutes; or
• accounting records for each fiscal year.

Societies must provide records within 14 days of receiving a request. See section 26 of the Societies Act for more information.

If a society does not provide a record when it’s supposed to, the registrar or the court can order the society to provide the record.  

How to get an order:

1. An applicant writes to the registrar to request a record.
2. If the registrar agrees that the applicant is entitled to the record, the registrar must order the society to provide the record to the registrar.
3. The society must respond to the order within 15 days.
4. The society can either provide:
   1.  the record; or
   2. a signed statement explaining why they have not provided the record.
5. The registrar will share the record or the signed statement with the applicant.

The applicant can apply for a court order if:

• the society provides a signed statement instead of the record; or
• the society doesn’t comply with the registrar’s order.

You can find out more in section 111 of the Societies Act.

Request a general meeting

Members can also request a general meeting. They can request a meeting by sending a written request to the society’s address and to each of the board members’ addresses.

Their written request must be signed by 10 per cent of voting members (or the percentage required by the bylaws) and contain:

• the reasons why they want the meeting; and
• any special resolutions they hope to pass.

The board needs to then call a meeting and schedule it within 60 days of when they receive their letter.

If 3 weeks pass and the board still hasn’t called a general meeting, the members who signed the letter can call the meeting themselves. 

You can find more information in section 80 of the Societies Act.

Propose a topic or special resolution to be considered at a general meeting

Members can also propose a special resolution to be voted on at this meeting. They can do that by sending a written proposal to the society.

The proposal must be:

• 500 words or less; and
• signed by two members, or 5 per cent of the voting members, whichever is greater.

If the society gets the proposal more than 7 days before they give notice of a general meeting, they must include the proposal in the notice. They must also include:

• a copy of the proposal; and
• the names of the voting members that signed the proposal.

Members can also request that the notice include a statement of support.

Societies don’t have to consider proposals that are similar to other proposals made in the last 2 years.

See section 86 of the Societies Act for more information.

Ask the accountant to attend a general meeting

A member or a board member can ask that an accountant attend a general meeting. It must be a general meeting where the society plans to present and discuss the financial statements.

To ask an accountant to attend, you need to:

• write to the society at least a week before the meeting;
• ask that the accountant be required to attend;
• inform the accountant as soon as you can; and
• pay any related expenses.

When the accountant comes to the general meeting, the accountant must answer questions concerning the financial statements. Find out more in section 133 of the Societies Act.

Amending financial statements

If a society’s financial statements need to be amended based on information that could have been determined before the AGM, a board member must:

• communicate those facts as soon as practical to the accountant and other board members;
• amend the financial statements; and
• send the amended statements to the accountant.

The directors would then have to share amended financial statements with members and explain the effect of the amendment.

This is in section 134 of the Societies Act.

Vote to remove a board member a member

A society can vote to remove a board member or a member. They could also vote to discipline a member.

Removing a member

A society needs to vote by special resolution to remove a member unless the bylaws have different rules.

Before removing a member, the society must:

• send the member written notice of the proposed discipline or expulsion, including the reasons; and
• give the member a reasonable opportunity to tell their side of the story to the other members of the society.

You can find details about removing a member in section 75 of the Societies Act or by looking at the society’s bylaws.

Removing a board member

A society must vote by special resolution to remove a board member. They must also follow any other rules in the bylaws.

You can find out more about removing a board member in section 53 of the Societies Act or by looking at the society’s bylaws.

Voting on a special resolution

To pass a special resolution for things like removing a director or member, the society needs to

• hold a general meeting, which either the board or members can call;
• give members appropriate notice of the meeting (check the bylaws – if they do not specify, the default is 14 days); and
• give members the content of the special resolution with the appropriate notice.

A special resolution needs to pass by at least 2/3 of the vote.

Find out more about how to pass a special resolution.

If you cannot resolve the problem, consider approaching the court with a complaint.

People that can make a complaint about a society to the courts are the following.

• A member of the society.
• A director of the society.
• The registrar.
• Another person the court deems appropriate to make a complaint.

These people are called “complainants.”

A member can apply for a court order on the grounds that the activities of the society or one of its board members are unfair or prejudicial to a member. This is in section 103.

A person can also complain to the court if:

• someone contravenes the Act or the society’s bylaws;
• it’s reasonable to assume someone is about to contravene the Act or the society’s bylaws; or
• a society is acting in a way that is contrary to its purposes.

This is in section 105.

What can the court do?

The court can do many things to rectify wrongdoings.

• Prohibit the society from doing something it planned to do.
• Regulate the society’s internal affairs.
• Remove a board member or appoint a new one.
• Make the society provide financial statements to the court.
• Order the society to compensate someone.
• Order the society to correct its records.
• Dissolve the society.
• Stop the society from doing something that doesn’t comply with the Act or is contrary to the society’s purposes.
• Order an investigation.
• Direct a person who is about to violate a provision of the Societies Act to comply with the Act.

There are more details in section 103, 104 and 105.

We recommend working with a lawyer before applying for a court order.

A complainant can apply to court to order an investigation of a society.

The registrar gets notified when an investigation of a society takes place.

The complainant will also be responsible for paying the investigator unless the court orders that the society pay the costs.

We recommend working with a lawyer before applying for a court order for an investigation.

Section 114 of the Societies Act contains more details about investigations.

Improperly distributing a society’s property

According to the Act, a society can distribute its money or property if the following happens:

• Both parties agree on the price.
• It furthers the purposes of the society.
• It’s for the payment of costs and expenses incurred in the normal course of the society’s activities.
• It pays or distributes property to a qualified recipient.

You can find out more in section 5 of the Societies Act.

You need to pass a special resolution to authorize the selling, leasing, or disposing of all or most of a society’s property. Otherwise, it’s considered an offence. Section 97 of the Societies Act lays out those rules.

Improperly liquidating assets when a society dissolves is also an offence. Section 137(2) tells you how to properly dispose of a society’s property when it dissolves.

Improperly using or keeping records

It’s an offence to use a society’s list of members or directors for any reason other than what you’re supposed to use it for. You can use the list of members or directors to do the following.

• Call a general meeting.
• Make a member’s proposal.
• Influence the voting of members.
• Advance the internal affairs of the society (See section 27 and 28).

It’s also an offence to refuse to provide a record when you’re required to without a reasonable excuse. See section 208 of the Societies Act for more information.

Financial mismanagement

Societies must take care when managing their finances and their financial statements. It’s an offence to:

• invest a society’s funds in anything other than what the bylaws allow (35);
• issue financial statements that haven’t been signed by the board;
• falsify an accountant review (40);
• appoint an accountant who isn’t independent of the society or who isn’t qualified (126(2) and 127(1 and 2));
• refuse to allow the accountant to access to information they need (129(2)); and
• fail to amend the financial statements if information comes to light that requires them to be amended (134(2 to 5))

It’s also an offence for an accountant to not attend an AGM they’re required to attend without a reasonable excuse.

Acting in an important role without qualifications

The Societies Act has qualifications for who can be a director, an accountant or a liquidator.

Acting in one of those positions when you aren’t qualified is considered an offence. Appointing someone who is unqualified is also considered an offence.

Making a misleading statement

It’s an offence for someone to:

• make a false or misleading statement that appears in one of the society’s records;
• omit certain information that makes the statement false or misleading (209); or
• make or acquiesce to a false statement as a board member.

It would not be considered an offence if the person did not know the statement was false or misleading when they made it.

Other offences

• Failing to notify the registrar when a liquidator resigns (152).
• Failing to assist a liquidator (161).
• Accepting donations or public funding as a member-funded society and failing to change to cease to be a member-funded society (186)(1)(a).

The Act also says that a member can apply for a court order if the activities of a society were unfair, oppressive or prejudicial to a member. This is not listed as an offence and is in section 103.

Penalties for offences can range from a fine to imprisonment. The details are in section 210 of the Societies Act.

If a society is committing an offence or another crime you know of, you have options about how you approach it. You could:

• try to resolve the matter internally;
• call the RCMP; or
• talk to a lawyer about taking the matter to court.

You can contact a law firm to hire a lawyer or you may wish to contact the Law Society of Yukon.

Yukon Public Legal Education Association may be able to help provide free legal information. Find out more on the YPLEA website or call the Yukon Law Line at 867-668-5297.

You may also want to contact Court Services.