Annual General Meetings: A primer for Alberta nonprofits

JUNE 20 / Yvonne Chenier

Now that we are returning to a more normal way of operating, it may be a good time for Alberta nonprofits to think through the best way to plan for their Annual General Meetings. Should you hold a virtual or an in-person meeting? Are you allowed to hold a virtual meeting? What about hybrid meetings where some people are in the room and some people are attending virtually? How should voting happen?  What do you have to do to be prepared?

The answer to all these questions can be found in the legislation that the nonprofit was incorporated under and the bylaws or articles of association that have been adopted by the nonprofit that comply with the legislation. Together these are the specific rules that govern any nonprofit. In the past, each statute used to have slightly different rules for Annual General meetings, but in 2021 and as recently as May 31, 2022 amendments were made and the legislated requirements are now similar. However, it is still important to understand what rules apply to your specific nonprofit.  

Following is an up-to-date summary. Keep in mind that in Alberta, attending or holding a meeting by electronic means is defined as “a method of electronic or telephonic communication that enables all persons attending the meeting to hear and communicate with each other instantaneously, including, without limitation, teleconferencing and computer network based or internet-based communication platforms.” 

For an organization incorporated as a Society under the Societies Act

The Societies Act requires that a society hold an annual general meeting and shall present at that meeting a financial statement setting out its income, disbursements, assets and liabilities, audited and signed by the society’s auditor. Note that the Societies Act was amended effective May 31, 2022 to provide that these meetings do not have to be held in Alberta anymore.

Since the 2021 amendments, the Societies Act has also provided that unless the bylaws, articles or other governing documents expressly provide otherwise, members meetings and directors meetings may be held entirely by electronic means,  and a person entitled to attend a members meeting or a directors meeting may attend the meeting by electronic means and is entitled to vote at the meeting by any electronic, telephonic, or other method that the Society has made available to that person.

The Societies Act now also expressly states that unless the bylaws, articles or other governing documents expressly provide otherwise, a person attending a meeting by electronic means is deemed to be present in person at the meeting.

To send notices of any meetings, the new rule is unless the society’s bylaws, articles or other governing documents expressly provide otherwise, a notice of a meeting under the Societies Act may be sent by electronic means in accordance with the provisions of the Electronic Transactions Act.

What does this mean for an Alberta Society?

Every Alberta Society needs to check their bylaws or other governing documents such as policies made pursuant to the bylaws to see if there are any express provision that would prohibit the sending of electronic documents or having electronic meetings and electronic voting. If there is no such express provision, then the Societies Act would allow an electronic presence for those eligible to attend the meeting.

The key takeaway for all Alberta Societies is to first understand what you want to have in place for all of your directors and members meetings. If you want to prevent someone from attending and voting electronically, or do not want to rely on an electronic notice of the meeting, then the bylaws should expressly state that and may need to be changed. The organization itself should be in control of this process, though its adopted bylaws and policies and procedures not the individual directors and members. Consider the potential expense if one person wants to attend electronically and vote at a meeting of a Society.

For an organization incorporated as a nonprofit Company under Part 9 of the Companies Act

Every Part 9 Alberta Company has to ensure that the first annual general meeting is  held within 16-months from the date on which the company is entitled to commence business, and thereafter a general meeting of the company shall be held once at least in every calendar year and not more than 16 months after the holding of the last preceding general meeting.

In Alberta, under the Companies Act, meetings of the board of directors of a company may be held at any place within or outside Alberta, and since the 2021 amendments, unless the company’s articles of association or other governing documents expressly provide otherwise the Companies Act now provides that members meetings and directors meetings may be held entirely by electronic means and a person attending a meeting by electronic means is deemed to be present in person at the meeting.

The Companies Act now also provides that a notice or document that is required or permitted to be sent, served or delivered under the Companies Act, the regulations or the articles may be sent by electronic means in accordance with the Electronic Transactions Act.

The key takeaway for all Alberta Part 9 Companies is to review your Articles of Association to see that the provisions state what you want to have in place for all of your directors and members meetings.

If you want to prevent someone from attending and voting electronically, perhaps because of extra costs or the need to control who or to verify the identity of who is attending or voting at a meeting, then the Articles should expressly state that and may need to be changed. Consider the expense if one person wants to attend and vote electronically at a meeting of a Part 9 Alberta Company.

For an organization incorporated under the Canada Not-for-Profit Corporations Act and registered in Alberta to carry on activities in this province

Under the modern Canada Not-for-Profit Corporations Act, unless the Articles or Bylaws otherwise provide, the directors may meet at any place and on any notice that the bylaws require. Furthermore, a director may, in accordance with the regulations made under the Act, and if all of the other directors consent, participate in a meeting of directors or a committee of directors by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting. A director so participating in a meeting is deemed for the purposes of this Act to be present at the meeting.

Every Canada Not-for-Profit Corporation (CNCA) must hold its annual meeting of members not later than 15 months after the last preceding annual meeting, but not longer than 6 months after the end of the corporation’s preceding financial year. The annual meeting of members must be held in Canada at a place specified in the by-laws or, if the by-laws do not contain such a provision, at a place that the directors determine. An annual meeting can be held outside of Canada only if permitted by the corporation's articles or if all of the members entitled to vote at the meeting agree.

It should be noted that a specific provision has always been in the Canada Not-for-profit Corporations Act for a Not-for profit Corporation incorporated under this modern legislation to hold a members meeting entirely by electronic means if the bylaws so state and then it can be permitted as long as all participants can communicate adequately with each other. A person so participating in a meeting is deemed for the purposes of this Act to be present at the meeting.

The key take away for a CNCA Is to review the legislation in conjunction with the bylaws and any policies and procedures already made to ensure that they comply with the provisions of the Act and the end result is leads to what will be convenient for your organization.

A word about voting and proxy voting

The Canada Not-for-Profit Corporations Act is very comprehensive when it discusses voting and electronic voting. At any meeting, a member may demand a ballot either before or after any vote by show of hands. Unless the bylaws otherwise provide, any vote may be held, in accordance with the regulations, entirely by means of telephonic, an electronic or other communication facility, if the corporation makes available such a communication facility.

Most importantly, under the Canada Not-for-Profit Corporations Act, is that it provides regulations that contain comprehensive requirements for absentee or proxy voting.  Alberta nonprofits not incorporated under that Act could review these provisions and use their bylaws and policies to create a similar framework, if desirable.

It should be noted that in certain circumstances all the members can sign resolutions in writing instead of holding a meeting. A properly signed resolution in writing is just as valid as if it had been passed at a meeting of members in most situations. Such a resolution in writing must be signed by all members who would have been entitled to vote at the meeting and becomes part of the records, just like minutes of a meeting. This is often used where there are only a handful of members.

What kind of meeting and voting  is allowed?

As the above discussion outlines, each nonprofit organization needs to know not only what legislation they are incorporated under, but also what governing documents apply and specifically what these governing documents say about fully electronic, hybrid electronic, or in person meetings for directors and members meetings.  

The key steps are as follows:

1.       Know the legislation your organization is incorporated under and if it is incorporated under the Societies Act or Part 9 of the Companies Act, assume the legislation allows for virtual meetings, unless the governing documents of the organizations state otherwise. Canada Not-for-Profit Corporations are provided with a more comprehensive framework in the legislation and the regulations.

2.        Review your bylaws or articles. Do they prohibit or give the organization the power to hold a virtual AGM? Is there flexibility to use modern technology for voting? If not consider amending them to include a robust virtual meeting and voting clause. A common provision found in Canada Not- for-profit corporation bylaws that has often been adapted for use in Alberta is: “If the Organization chooses to make available a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during a meeting of members, any person entitled to attend such meeting may participate in the meeting by means of such telephonic, electronic or other communication facility in the manner provided by the policies and procedures of the Organization. A person participating in a meeting by such means is deemed to be present at the meeting. Notwithstanding any other provision of this by-law, any person participating in a meeting of members pursuant to this section who is entitled to vote at that meeting may vote, in accordance with the policies and procedures of the Organization, by means of any telephonic, electronic or other communication facility that the organization has made available for that purpose.”

3.       Create and approve policies and procedures to be made for these meetings that can keep up with our rapidly changing technology.

4.       Communicate these changes to those who will be affected.

5.       Test the technology! It is time to review and amend your bylaws or articles and create policies and procedures for meetings and voting. The time to do this is not at the meeting when the issue is arising and someone is demanding or questioning an electronic meeting or vote, but before the meeting to be prepared for any challenges you may encounter.

Sources:

Societies Act, RSA 2000, c S-14, https://canlii.ca/t/55425

Companies Act, RSA 2000, c C-21, https://canlii.ca/t/5542d

Canada Not-for-Profit Corporations Act, SC 2009, c 23, https://canlii.ca/t/535b0

Yvonne Chenier, QC, is a lawyer and philanthropy consultant –Yvonne brings more than 35 years of experience helping those in the philanthropic, nonprofit, and social enterprise sectors as general legal counsel and as an advisor on planning, organizational, regulatory and governance matters.