In a further step to assist BC societies in managing the impact of the COVID-19 pandemic, the British Columbia Registrar of Companies (the “Registrar”) issued a decision extending the period of time in which societies may hold their 2020 annual general meetings (“AGMs”) to November 2021. Previously, the BC government had permitted BC societies to hold their AGMs and other meetings remotely by means of electronic communications, even if not permitted in their bylaws (see our Corporate/Commercial Law Bulletin Electronic Meetings now Generally Available to BC Companies, Societies and Cooperatives).
Normally, BC societies must hold their AGMs once every calendar year. However, societies can apply to the Registrar for an extension to postpone an AGM to a date within the first quarter of the next calendar year. For the 2020 AGM, the postponement period has now been extended until November 1, 2021. At this point, the Registrar’s decision does not have an end date. Therefore, the ability to postpone AGMs by up to 11 months would remain available to societies for future years until the Registrar’s decision is revoked.
Societies that wish to avail themselves of the possibility to move their 2020 AGMs should consider the following factors in making their decision:
- An extension application must be made to the Registrar before December 31, 2020.
- The society must still hold an AGM for 2021 (which effectively means two AGMs within one calendar year unless there is a further extension).
- An extension of the 2020 AGM to 2021 generally does not affect the requirement for a society to present to its members financial statements for a period ending no more than six months before the AGM date. The postponement of the 2020 AGM into 2021 could therefore have the consequence that the financial statements presented at the 2020 AGM would cover a period of more than one financial year.
For example if the financial year of a society ended on June 30, 2020, the financial statements to be presented at the 2020 AGM would normally cover the period from July 1, 2019 to June 30, 2020. However, if the 2020 AGM were postponed to April 1, 2021, the financial statements to be prepared for the AGM would need to cover at least the period from July 1, 2019 to September 30, 2020 (six months prior to the 2020 AGM date).
The requirement to produce current financial statements may mean additional costs or administrative challenges for societies, in particular those that must prepare audited financial statements.