Bylaw Basics

November 12, 2009City of Calgary

Contents Governance Incorporation of Societies Bylaws - the fundamental governing rules

Needed components of bylaws Membership Meetings Government Management & finances

Changes to bylaws Resources & Links

Checklist & examples Discussion & questions?

ExpectationIf you are a society in Alberta, the

expectation is that you willGOVERN

the organization in a democratic, efficient and effective way, according to your

BYLAWS AND POLICIESon behalf of the

PEOPLE YOU SERVE.

Governance Governance is all about relationships and

how we organize ourselves to do work Each of the 3 areas are needed for strong

& effective governance Fiduciary – define problems & reviews

performance – oversight & authority Strategic – solves problems & shapes

strategies Generative –frames problems & engages in

sense-making – gives fresh perspective

Governance

Governance as Leadership

Good governance can be in 3 concepts;

Strategic (logical)

Generative (expressive)

Fiduciary (productive)

Options for Incorporation FOR NOT-FOR PROFIT ORGANIZATIONS

Societies Act Alberta Companies Act The Canada Corporations Act Other Special Statutes

Cooperative Associations Act FCSS / Children’s Services Act Agricultural Societies Act Religious Societies Land Act Etc.

Private Act of Legislature

Incorporation Most not-for-profits in Alberta incorporate

under the Societies Act However Section 3 states:

“Five or more persons may become incorporated…or other useful purpose, but not for the purpose of carrying on a trade or business.”

Need application for incorporation and the Bylaws for the society Application includes: Name of the Society Objects of the Society Incorporators of the Society

OTHER CONSIDERATIONS Under which Act is your organization incorporated? What is your status under this Act? Are you current with respect to any necessary filings? Does your organization answer to any other governing

bodies? Are there any formal partnership agreements? Does your organization have to meet licensing

requirements? Are you a chapter organization which answers to

another governing body on a regional, provincial or national level? What are those levels and accountabilities?

Bylaws Bylaws are the fundamental governing

rules and regulations of any society. State how the society is to be governed and how

the powers of the society are to be exercised. Ground rules that the board uses to develop its

structure, clarify roles, responsibilities and functions, and establish meeting and voting procedures.

May be called the Constitution, Charter, or Rules and Regulations or a combination of these terms.

Specific Techniques for Drafting Bylaws Definitions – glossary with terms and acronyms

Draft carefully & use consistently

Plain Language – short sentences with 1 idea and short paragraphs

Numbering – Number each separate paragraph for reference

Content of Bylaws 1. Name of the Society* 2. Bylaws* 3. Definitions 4. Membership in the Society

Terms of Admission* Rights of Obligation* Conditions of Withdrawal* Expulsion*

5. How to Draft Your Bylaws Mode and time of calling general and special meetings* Quorum* Rights of Voting*

6. Governance Structure of the Society The board of directors* The executive The committee Appointment and Removal* Duties and Powers* Remuneration*

7. Management and Financial Matters Registered office Seal of the Society* Financial records and books* Minute books and other records* Borrowing powers* Audit* Indemnities

8. Amendments* 9. Dissolution*

*These are the minimum requirements of the Societies Act.

Introductory Articles Preamble – short paragraphs including the

name & this document is the bylaws Name must have: one of the required words, a

descriptive element, a distinctive element

Definitions – a glossary defining terms and acronyms

Objects of the society –drafted clearly and precisely as they define what the society has the power to do

Drafting Bylaws: Membership Membership - Who the members are & how

What their rights and duties are as members Categories of members

Examples often used: Voting Members, Honorary Members, Affiliated Members, Junior Members, Life Members, Active Members, Non-Voting Members, Associate Members, Senior Members, Young Members, Full Members

Admission of members -How does a person become a member? Withdrawal of membership

Voluntary Expulsion or suspension

Membership Fees –who decides, when are they due, etc. not the amount

Rights & Obligations – of each category of members

Meetings Annual General Meeting - AGM

Section 25 of the Societies Act states: “25 A society shall hold an annual general meeting in

Alberta and shall present at that meeting a financial statement setting out its income, disbursements, assets and liabilities, audited and is signed by the society’s auditor.”

There is no right or wrong time to hold the AGM. What is the best time for your particular society? The bylaws should allow the AGM to take place as long

as four months after the end of the fiscal year. It can take that much time to prepare financial statements.

Meetings- Annual General Meeting Who calls the AGM? -You must state who calls the AGM and who chooses

its actual time and place. board of directors usually calls the meeting or the executive or the president

Bylaws must specify the length of time required for notice. Be careful that the time is not too short. You must give your members a minimum of 21 days’ notice for a

special resolution. You may notify members of the meeting using:

A notice in a society newsletter A notice published in newspapers A notice may be circulated by e-mail Posters placed in a location where most members gather

What is the AGM Agenda? - decide the business of the AGM Bylaws should include:

A standard agenda for the AGM Other agenda topics added by the board of directors Other specific motions that any member has given notice of before the

meeting is called

General Meetings: Include all prior info. Other Regular General Meetings Special General Meeting

Who can force the board to call a special general meeting? What business can occur at this meeting? What notice do members require?

What are the Procedural Rules for General meetings? What is the quorum for meetings? Are the meetings open to the public? Who chairs the meeting –usually the President How does the meeting adjourn? How does voting occur? Special structure? By proxy? What majority is needed? Does the President or chair vote? What happens if a member dose not get notice of a meeting?

Meetings: specify the basic rules When to hold meetings Who call the meetings (& how) Who votes How the votes occur

Governance Structure Body/bodies that govern between general

meetings Basic Structure –what type of board?

Policy governing board Administrative governing board

Board -"9(4)(d) The bylaws that accompany the application shall contain provisions for all of the following matters: (d) the appointment and removal of directors and officers and their duties, powers and remuneration.”

Board of Directors Board is required – may be called;

Executive, council, board of governors, board of administrators etc.

The powers & duties of the board The Societies Act requires a meeting of all members to

address certain important business. The matters are: Amending the bylaws (s. 15) Amending the objects (s. 16) Issuing debentures (s. 18) Surrender of Certificate of Incorporation (s. 34) Winding up (s. 35(1))

Board of directors can legally deal with all other matters, unless restricted in the bylaws

Board of Directors What size is the board? Who are the directors? How do are they elected?

Can a director be re-elected? What are the terms for board members? Other requirements for electing directors?

Can a director resign? Be removed? How is a board vacancy filled? How often does the board meet? What rules govern the board meetings?

Executive Committee May not need executive If large society, no paid administrator,

then board may be policy-making body and executive is management body

Consider; Is an executive committee needed? What is the relationship between board &

executive (& administrator)? Define roles & responsibilities of executive an

administrator

Executive Committee Bylaw to allow the board to delegate

powers to the executive committee How large is the executive? Who is on the executive? What rules govern the meetings of the

executive committee?

Officers Must have some officers Minimum usually a president & secretary What are the responsibilities and duties of

each position? How do we select the officers? Can an officer resign? Be removed from

office? How do we fill a vacancy?

Other Committees Bylaws should state that the board has the power

to set up committees Can give the board power to assign functions,

responsibilities, and powers What are the permanent or standing committees?

Executive Nominating Membership Finance or fundraising Personnel etc.

Other Committees What are the relationships between

committees & board or executive? What are the duties of each committee How do we form the committee? How do we fill vacancies on committees? What rules govern the meeting of the

committees?

Management & Finances Bylaws must describe important

administrative, financial & management matters

Registered Office – choose the city/town only (not address)

Seal of the Society –shows authority Adopting a seal Who controls it How & when to use the seal Who countersigns the seal

Management & Finances Fiscal Year of the Society –any consecutive

period of 365 days When is the AGM? Have a date reasonably close to AGM What are the fiscal years of major sponsors? Is there a natural season?

What about finances & society’s books? Must keep books properly Who signs the checks? Who keeps the books Who audits the books –Audit must be presented at AGM

What about contracts of the Society?

Management & Finances What are the borrowing powers of the Society?

May not borrow without bylaws This includes overdraft - so include some authority for the

board to borrow small sums Will board members be paid honorariums?

Be careful about paying members for additional services What about indemnity & protection for directors &

officers? Not absolute protection Should have adequate insurance protection too

CHANGES TO YOUR BYLAWS May need to make fundamental changes

to its structure or bylaws occasionally

The Societies Act has special requirements on bylaw changes: Amending the bylaws Changing the objects Issuing debentures Surrendering the Certificate of Incorporation

CHANGES TO YOUR BYLAWS These changes must have the approval of

the members Must be a special resolution at a Special

General Meeting called for that purpose or an Annual General Meeting.

Must be at least 21 days’ notice to all members.

At least 75% of the members who vote at the meeting must approve the change.

Your bylaws must state the procedure for amending the bylaws or the objects of the society.

WHAT IS INVOLVED? Re-drafting bylaws can be a simple or time-

consuming procedure; has it been done on a regular basis? are there are issues that cause conflict or contention among

members? What is the availability of the writing team?

Changes require ratification by a majority vote of members, according to the quorum numbers identified in your filed bylaws

And provided that notice of any proposed changes was forwarded to each member with the notice of meeting as specified in the filed bylaws.

HOW LONG WILL THIS TAKE? Once drafted, the change procedure will take

twenty-one days or more. Additional fees may be required.

Bylaws must be dated and signed by the same 5 people who signed the application (if they are the original version), or by the people who are listed on the records as the duly elected directors. Signatures must be witnessed (signature and address).

Bylaws, including amendments, do not come into effect until the Registrar has received them, reviewed them, approved them and stamped them “filed” and returned the stamped copy to the organization. This can take up to six weeks.

Resources on Bylaws City of Calgary – Recreation Coordinators Alberta Culture & Community Spirit,

Community Development, kim.rowe@gov.ab.ca

Board Development Program, http://culture.alberta.ca/bdp/default.aspx

Drafting & Revising Bylaws –PDF workbook http://culture.alberta.ca/bdp/workbooks/Drafting_%20Revising09.pdf

Resources on Governance City of Calgary – Recreation Coordinators

Alberta Culture & Community Spirit, Community Development

http://culture.alberta.ca/communitydevelopment/default.aspx

CentrePoint for Non-Profit Managementhttp://www.thecentrepoint.ca/today/index.html

Other ResourcesHow to Incorporate a Not-For-Profit Society (Alberta) http://www.servicealberta.ca/900.cfm

How to Register a Charitable Organization (Alberta) http://www.servicealberta.ca/661.cfm

How to Register a Charity (Government of Canada - Canada Revenue Agency)http://www.cra-arc.gc.ca/tx/chrts/menu-eng.html

Registering A Charity for Income Tax Purposes (Handbook) 1-800-267-2384 for toll-free calls (English);

http://www.cra-arc.gc.ca/E/pub/tg/t4063/t4063-e.html

Societies Act http://www.qp.gov.ab.ca/documents/acts/S14.CFM

Societies Regulation http://www.qp.gov.ab.ca/documents/regs/2000_122.cfm

Keeping Records (Canada Revenue Agency)http://www.cra-arc.gc.ca/E/pub/tg/rc4409/rc4409-e.html

Board Development Information Bulletins http://culture.alberta.ca/bdp/bulletins.aspx

Voluntary Sector Publications (Insurance etc.) http://www.culture.alberta.ca/voluntarysector/publications.aspx

Service Alberta – Corporate Registries http://www.servicealberta.ca/Corporate_Registries.cfmCorporate Link is Corporate Registry's automated telephone information service. The link provides

information via Corporate Link Codes on Alberta and extra-provincially registered corporations, trade names, partnerships, limited partnerships, and non-profit organizations. Telephone number: 780-427-2311 Edmonton, Alberta, Canada (AB RITE line 310-0000)

Resource Centre for Voluntary Organizations http://www.rcvo.org/