The new Societies Act now has a category of society called “member-funded societies.”
Member-funded societies are a unique category. Member-funded societies exist primarily for the benefit of their members, rather than for the benefit of the broader community.
The member-funded category may be useful for certain groups such as:
- small groups and clubs, such as book clubs, bridge clubs, and more;
- golf clubs; or
- planning committees, such as a graduation planning committee or a fundraising group for a special event.
Member-funded societies are societies that meet these 5 criteria:
- exist to benefit their members;
- have a mandatory member-funded statement in their purpose;
- would distribute their assets to members if they dissolved or liquidated;
- cannot receive government or public funding or donations;
- cannot be a registered charity; and
- are funded by their membership or other activities.
The activities of member-funded societies are funded by members investing in the society. This is different than paying a membership fee to an ordinary society, where membership fees:
- allow people to be a part of the society; and
- vote within the society.
Societies do not automatically become "member-funded" under the Act. It's a special status you need to get by:
- incorporating as a member-funded society; or
- converting to a member-funded society.
Here are some special rules that apply to member-funded societies.
|
Activity |
Member-funded societies |
Ordinary societies (class A or B societies) |
|
Paying board members |
Majority of board members can be paid by the society for reasons other than for being a director (section 44 does not apply) |
Majority of board members cannot be paid by the society for reasons other than being a director (section 44 applies) |
|
Providing financial statements |
No public rights to copies Financial statements are not required to report on the remuneration of directors, employees and contractors (section 38 does not apply) |
Public has the right to get copies of financial statements (section 30) Financial statements must include information about the remuneration of directors, employees and contractors (section 38 applies) |
|
Number of board members |
1 director is sufficient – no requirements for board members to be Yukon residents |
Must have at least 3 board members; at least 1 must be a resident of the Yukon |
|
Requirement for financial review from an accountant |
No requirement for financial review from an accountant |
Class A societies are required to get a financial review from an accountant every 3rd year, provided that their bylaws allow them to waive the requirement for financial review. |
|
What happens to assets when the society is dissolved |
No restrictions – assets could go to members |
Assets must be distributed to a qualified recipient (such as another society or registered charity) |
Even if membership fees make up most of your society's revenue, your society is not necessarily "member-funded."
To be a member-funded society, you need to either incorporate as one, or convert to one.
It's easier to incorporate as a member-funded society than it is to convert to one. Societies who want to convert to a member-funded society must:
- Pass a special resolution with members to change their constitution to include the mandatory paragraph for member-funded societies. Find out how to pass a special resolution.
- Apply for a court order that confirms that the society has not received public donations, government funding or is a registered charity.
- File a constitutional alteration form and a copy of the court order with the registrar. Find out how to change your constitution.
The society starts becoming a member-funded society when they have filed the constitutional alteration form with the registrar.
If your society is a member-funded society that received government funding or public donations, they immediately stop being a member-funded society. This means you must:
- Immediately change your constitution to remove the mandatory statement for member-funded societies.
- File a constitutional amendment form ‒ no special resolution is required. The cost is $20 online and $40 on paper. Find the constitutional amendment form.
- Pass a special resolution with your members to update your bylaws to the class A or B society bylaws, presuming you adopted our sample bylaw set for member-funded societies when you incorporated.
- File a bylaw alteration form. The cost is $20 online and $40 on paper. Find the bylaw alteration form.
- Make sure your society has at least three board members. If not, you need to appoint new board members until the next AGM and file the change of directors form. The cost to file a change of directors form is $20 online and $40 on paper. Find the change of directors form.
If your society wants to stop being a member-funded society
You must:
- Pass 2 special resolutions with your members:
- 1 to amend your constitution to remove the mandatory statement for member-funded societies; and
- 1 to update your bylaws.
- File a constitutional amendment form.
- File a bylaw alteration form.
- File a change of directors form to add directors, if necessary.
Here are some more resources:
We're open Monday to Friday from 8:30 am to 4:30 pm at 307 Black Street, 1st floor in Whitehorse.
For clients who prefer limited contact, a drop box is located in the main lobby.
Phone: 867-332-7950, or toll free in Yukon 1-800-661-0408, extension 5314
Fax: 867-393-6251
Email: societies@yukon.ca
Mail:
Government of Yukon
Corporate Affairs (C-6)
Box 2703,
Whitehorse, Yukon Y1A 2C6