Office of Public Registry Administration [email protected]/documents/9/104139-Fact Sheet_Non-Profit... · A meeting of members, a class of members or

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09/07/2017 Page 1

NON-PROFIT CORPORATIONS FACT SHEET:

MEMBERS, MEETINGS AND VOTING

What is the applicable legislation?

The current Act is The Non-Profit Corporations Act, 1995.

The current Regulations are The Non-Profit Corporations Regulations, 1997.

Both Acts and Regulations contain all recent amendments and are available on the Publications

Saskatchewan website at www.publications.gov.sk.ca/freelaw/.

What is a member?

A member is a person who has a membership interest in a non-profit corporation. A

membership interest includes the rights, privileges, restrictions and conditions conferred or

imposed on a member or each class of members of a corporation in accordance with the

provisions of its articles or bylaws.

Subsection 2(1) of the Act

What evidence do I have that I am a member?

The following can be evidence that a person is a member:

a membership card or certificate issued by the corporation;

a security certificate issued by a corporation; and/or

an entry in a membership register of a corporation.

Sections 33 and 242 and Subsection 115(4) of the Act

What would be on a membership card?

The following shall be stated on a membership card or certificate issued by a corporation that has

more than one class of members:

the rights, privileges, restrictions and conditions that constitute the membership interest

of a member of each class; and

Office of Public Registry Administration [email protected]

http://www.qp.gov.sk.ca/documents/English/Statutes/Statutes/N4-2.pdf

http://www.qp.gov.sk.ca/documents/English/Regulations/Regulations/N4-2R1.pdf

http://www.publications.gov.sk.ca/freelaw/




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that the class of membership it represents has rights, privileges, restrictions or conditions

attached to it and that the corporation will furnish to a member, on demand and without

charge, a full copy of the text of those rights, privileges, restrictions or conditions.


What is a membership interest?

It is the rights, privileges, restrictions and conditions conferred or imposed on a member or each

class of members of a corporation in accordance with the provisions of its articles or bylaws.


What protections are members awarded?

A member is not liable for any liability, act or default of the corporation, unless he or she has

taken possession of assets which are being claimed by another party. In that case, the property

may need to be returned to the party claiming a right to it.

Section 32 and subsection 211(4) of the Act

What classes of membership exist?

It depends on what the articles of incorporation say.

The articles have to provide for at least one class of membership that entitles the members of that

class to vote at all meetings of members. The articles may also provide for a number of other

types of memberships. Where different classes of memberships exist, the articles of

incorporation must clearly define the rights, privileges, restrictions and conditions for each

membership class.

Section 113 of the Act

Can the directors determine the rights of each membership class?

Maybe. The articles may authorize any class of membership in one or more subdivisions and

may authorize the directors to determine the designation, rights, privileges, restrictions and

conditions of those membership classes, subject to any limitations set out in the articles.





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Can directors admit members?

The directors may admit any person as a member or honourary member by a resolution.

However, the articles or bylaws may provide that a resolution is not effective until it has been

confirmed by the members in a general meeting. Honourary members do not have all voting

privileges unless the resolution specifically confers them.

Subsections 115(1)-(3) of the Act

How does one lose their membership?

Unless the articles or bylaws state otherwise, transfer of a membership interest is not possible

and the membership interest can only be terminated in the following ways:

the member dies or resigns;

the member is expelled or his or her membership terminated in accordance with the

articles or bylaws;

the membership expires; or

the corporation is liquidated and dissolved.


What happens once a membership has been terminated?

If a membership has been terminated, the date and termination will be recorded in the register of

members and the rights and privileges of the terminated member cease to exist, unless the

articles and bylaws provide otherwise.

Sections 117 and 118 of the Act

Who has the power to discipline a member?

The articles or bylaws may provide that directors, members, or a committee of directors or

members may discipline a member or terminate their membership interest. Where this is

provided by the articles or bylaws, the circumstances and the manner in which this power may be

exercised must be set out.


What rights are awarded to a disciplined or terminated member?

Before termination or discipline may be determined, a member of a corporation has the right to a

fair hearing. In addition, an individual who feels that they were aggrieved due to discipline or

termination also has the right to apply to the court for relief.

Sections 120 - 121 of the Act




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UNANIMOUS MEMBER AGREEMENT

What is a unanimous member agreement?

An agreement among all the members of a corporation that restricts, in whole or in part, the

powers of the directors to manage the activities and affairs of the corporation

A unanimous member agreement gives all the rights, powers and duties of a director of the

corporation to a member where the agreement restricts the powers of the directors to manage the

activities and affairs of the corporation and the directors are relieved of their duties and

liabilities.

Subsection 2(1) and section 136 of the Act

MEETINGS

What is a meeting of members?

A meeting of members, a class of members or subdivision of members that does not constitute a

separate class of members of a corporation can be held or the purposes of:

electing or removing directors;

considering financial statements or any auditor’s report;

appointing an auditor or reappointing an incumbent auditor;

making any fundamental change; or

determining liquidation and dissolution.


Where are meetings to be held?

Meetings should be held at a location in Saskatchewan at the place outlined in the corporation’s

bylaws or, if the bylaws are silent as to location, as determined by the directors.

Meetings may also be held outside of the province if each member who has a right to vote agrees

on the location. Any attending member is deemed to have agreed to the location, unless they

attend for the sole purpose of objecting to the transaction of business on the grounds that the

meeting is being held unlawfully.


When must meetings be called?

The directors must call an annual meeting of members:

for the first meeting, no later than 18 months after incorporation; and

for each subsequent meeting, no later than 15 months after the previous annual meeting

unless the articles provide otherwise.

The directors may also call a special meeting of members at any time.




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Members and the courts may be able to request or order a meeting. Please see the questions

related to members requesting a meeting and a court ordering a meeting.

Sections 123, 133 and 134 of the Act

How is notice of the meeting of members provided?

If there are 250 members or less, notice of the time and place of a meeting of members is to be

sent to each:

voting member who is registered as of the record date;

director; and

auditor of the corporation.

Notice may be sent by prepaid mail or personally delivered to the member at his or her latest

recorded address.

Unless the articles or bylaws provide otherwise, if there are more than 250 members, it is

sufficient to give notice of the meeting by publication:

at least once in each of three consecutive weeks preceding the meeting in a newspaper or

newspapers circulated in the municipalities in which the majority of the members of the

corporation reside as shown by their addresses on the books of the corporation; or

at least once in a publication of a corporation that is sent to all its members not more than

fifty days prior to the meeting and not less than fifteen days in advance of the meeting.

If there is special business to be transacted at the meeting of the members, the notice must:

state the nature of the business in sufficient detail to permit the member to form a

reasoned judgment concerning that business; and

include the text of any special resolution to be submitted to the meeting.

Subsections 125(1)-(3) and (7) and 238(1) of the Act

What is the record date for notice of meeting of members?

A record date is used to establish who should be given notice of a meeting of members.

The record date is a date fixed in advance by the directors for the purpose of giving notice of a

meeting. It cannot be more than 50 days in advance and no less than 15 days prior to the date

that the meeting will be held. Notice of the record date has to be given by advertisement in a

newspaper published or distributed in the place where the corporation has its registered office if

the record date is fixed by the directors.

If no record date is set by the directors, it is set at:




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the close of business on the day preceding the day on which the notice is given;

if no notice is given, the day on which the meeting is held; or

the time of taking the vote of the members.


How are voting members registered?

A corporation must have a list of members, in alphabetical order, detailing the membership

interests held by each member. These individuals will each receive notice of the meetings and

shall be allowed to vote the membership interest which is shown opposite his or her name on the

prepared list.

A member may examine the list of members during usual business hours at the registered office

of the office of the corporation and at the meeting of members for which the list was prepared.


What notice has to be provided if a meeting is adjourned?

Unless the bylaws provide otherwise, if a meeting is adjourned for less than 30 days, it is not

necessary to give notice of the adjourned meeting other than an announcement at that meeting

that it is adjourned.

If a meeting is adjourned once or more for a total of 30 days or more, notice of the adjourned

meeting shall be given as if it was an original meeting.


How can notice of adjournment be sent?

A notice may be sent by prepaid mail addressed to, or may be delivered personally to a member

at his or her latest address as shown in the records to the corporation.


Can notice be waived?

A member can waive his or her right to receive notice for a meeting of members in any manner.

One way to waive notice is if that person attends a meeting of members except where he or she

attends a meeting for the express purpose of objecting to the transaction of any business on the

grounds that the meeting is not lawfully called.

In addition, if a notice is sent and returned on three consecutive occasions, the corporation is not

required to continue sending notices until the member provides, in writing, an updated address.




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Section 126 and subsection 238(4) of the Act

Can meetings notices be delivered electronically?

The Act does not speak to electronic notification but does contain specific instructions as to how

notices must be delivered or published.

Subsections 125(3) and 238(1) of the Act

What is considered special business?

All business transacted at any meeting of the members, other than the following, is deemed to be

special business:

consideration of financial statements;

consideration of an auditor’s report;

the election of directors;

the reappointment of an incumbent auditor; and

the consideration of bylaws submitted by the directors.

If there is special business to be transacted at the meeting of the members, the notice must:

state the nature of the business in sufficient detail to permit the member to form a

reasoned judgment concerning that business; and

include the text of any special resolution to be submitted to the meeting.

Subsections 125(6) and (7) of the Act

What is a quorum of members at a meeting of members?

Quorum is the smallest number of members who must be present at a meeting for decisions to be

made. Unless the bylaws provide otherwise, the quorum rules are:

a quorum of members is present regardless of the number of persons present at the

meeting, as long as the members entitled to cast a majority of the total number of votes at

a meeting of members are present or represented by a proxy;

if quorum is present at the start of a meeting, the members may proceed with business

even if quorum is lost during the meeting;

if quorum is not present at the start of a meeting, the members may adjourn the meeting

to a new time and place but attend to no other business; and

if a corporation has only one member or one member of any class of members, that

member present or by proxy constitutes a meeting.





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Can members request a meeting?

Yes. Meetings may be requested at any time by members whose membership interests carry 5%

or more of the rights to vote at a meeting of members. The meeting request must:

state the business to be dealt with at the meeting,

be sent to each director; and

be sent to the registered office of the corporation.


What do the directors do when they receive a members’ request for a meeting?

Upon receiving a request for a meeting, the directors must call a meeting immediately unless:

a record date has been fixed and notice given;

the directors have already called a meeting of members and notice has been given; or

the proposed meeting would be for the purposes of:

o enforcing a personal claim or redressing a personal grievance against the

corporation or its directors, officers or security holders;

o primarily promoting general economic, political, racial, religious, social or similar

causes unrelated to the activities of the corporation;

o the member has previously neglected within the last two years to present on a

proposal at a scheduled meeting after notice of the proposal had been given;

o substantially the same proposal was submitted within the last two years and

defeated; or

o the proposal is being used to garner publicity.

The directors must call a meeting within 21 days of receiving the request, or any member who

signed the request may call the meeting. Unless resolved otherwise at the meeting, the

corporation shall reimburse these members the expenses reasonably incurred by them in

requesting, calling and holding the meeting.

Section 133 and clauses 127(6)(b)-(e) of the Act

Can a court order a meeting to be held?

The court, on application by a director, voting member or the Director of Corporations, may

order a meeting of members of the corporation to be called in any manner and at any location

that the court directs. In addition, the court may also order that at this meeting, the quorum

required by the bylaws or the Act be dispensed with.





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MEMBER PROPOSAL

What if I want to bring a matter up at a meeting?

Any member who is entitled to vote at a meeting also has the right to bring forward matters to be

discussed at the meeting. This is called a member proposal.

To submit a member’s proposal, the member must submit to the corporation, at least 90 day

before the anniversary of the previous annual meeting of members, notice of the proposed matter

to be discussed at the meeting. The corporation is to attach the proposal to their meeting notice.

Where the member bringing forth the proposal requests it, he or she may also have 200 words in

support of the proposal attached to any notice given to members and may include their name and

address for contact purposes.

Where a member submits a proposal, unless a majority vote decides otherwise, the individual

member is responsible for the costs associated with sending the proposal and, if applicable, the

statement of support. However, no corporation or person acting on its behalf incurs any liability

by reason only of circulating a proposal or statement.


Can I propose a nomination for a director?

Yes. Unless a lesser number of members is provided for in the bylaws, nominations of directors

may be proposed by at least 5% of the members of a class of members who will be voting at the

meeting where the proposal will be discussed.


Can the corporation refuse to put my proposal before the members?

Yes. A corporation is not required to put a proposal before the members where:

the proposal was not submitted at least 90 days before the anniversary of the previous

annual meeting of members;

the proposal is being submitted for the purpose of enforcing a personal claim or

redressing a personal grievance against the corporation or its directors, officers or

security holders;

the proposal is being submitted primarily to promote general economic, political, racial,

religious, social or similar causes unrelated to the activities of the corporation;

the member has previously neglected within the last two years to present a proposal at a

scheduled meeting;

substantially the same proposal was submitted within the last two years and defeated; or

the proposal is being used to garner publicity.




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Where a corporation refuses to include a proposal in a notice of the meeting, the corporation

must notify the member within 10 days of receiving the proposal of the refusal and this must

include a statement of the reasons for doing so.

Subsection 127(6) and (8) of the Act

What can I do if I feel aggrieved by the refusal by the corporation to include my proposal

in the notice of a meeting?

If you feel that a proposal has been unjustly refused, you may apply to the court and the court has

the ability to restrain the holding of the meeting and make any further order it sees fit.

The applicant must give notice to the Director of Corporations and the Director is entitled to

appear and be heard in person or by counsel when the matter is heard by the Court.

Subsections 127(9) and (11) of the Act

What can I do if I feel aggrieved by a proposal?

The corporation or an individual claiming to be aggrieved by the inclusion of a proposal in the

notice for a meeting may make an application to the court to have the proposal omitted from the

notice of meeting. If the court agrees that the proposal was inappropriate pursuant to the Act, it

may make any order it sees fit.

The applicant must give notice to the Director of Corporations and the Director is entitled to

appear and be heard in person or by counsel.

Subsection 127(10) and (11) of the Act

VOTING

Who is entitled to vote at a meeting of members?

Unless the articles provide otherwise, each member is entitled to one vote.


How is voting done?

Unless it is provided otherwise by the bylaws, voting will be done by show of hands except

where the demand for a secret ballot is made by a member or proxyholder who is entitled to vote.

This request may be made either before or after a vote by hands is done.





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Can agreements be reached without holding a meeting?

Yes. A resolution is valid as if it were passed at a meeting of members if a resolution is:

in writing;

signed by all the members entitled to vote on that resolution at a meeting of the members;

a copy of the resolution is kept with the minutes of the meetings of members;

it does not deal with a director’s resignation or a director’s opposition to a proposed

action or resolution pursuant to subsection 97(2); and

it does not deal with an auditor’s resignation or an auditor’s opposition to a proposed

action or resolution pursuant to subsection 156(5).


Can two or more members make an agreement as to how to vote?

Yes. A written agreement between two or more members may provide that the voting rights

attached to their membership interests are to be exercised as provided in the agreement.


What is an ordinary resolution?

A resolution passed by a majority of votes cast by the members who voted respecting the

resolution. For example, approval by ordinary resolution is required to confirm, reject or amend

a bylaw.


What is a special resolution?

A resolution passed by a majority of not less than two-thirds of the votes cast by the members

who voted respecting that resolution or signed by all the members entitled to vote on that

resolution. For example, amendments to the articles of incorporation can be approved by a

special resolution.


PROXIES

What is a proxy?

A member can appoint a representative to attend and act on his or her behalf at a meeting of the

members by completing and executing a written form called a proxy.

Section 137




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May I use a proxy to vote at a meeting I cannot attend?

Maybe. If the articles allow for a proxy, a member may appoint a proxyholder to vote at a

meeting of members.


How is a proxy to be executed?

By the member or by his or her attorney authorized in writing.


For which meetings is a proxy valid?

A proxy is only valid at the meeting for which it is given or any adjournment of that meeting.


Can a member revoke a proxy?

Yes. A member may revoke a proxy:

by depositing a written instrument executed by the member or his or her attorney

authorized in writing to execute the instrument on the member’s behalf:

o at the registered office of the corporation at any time up to and including the last

day preceding the day of the meeting; or an adjournment of the meeting, at which

the proxy is to be used;

o with the chairperson of the meeting on the day of the meeting or an adjournment

of the meeting; or

o in any other manner permitted by law.


What duties does the proxyholder have?

A proxyholder:

must attend the meeting in person or have an alternate proxyholder attend the meeting;

must comply with the directions of the member who appointed him or her; and

has the same rights as the member who appointed him or her to:

o speak on a matter;

o vote by ballot; and

o vote by a show of hands.





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What happens if a proxyholder fails to follow the member’s directions?

Where a proxyholder fails to comply with the request of the member appointing him or her, the

proxyholder is guilty of an offence and liable to:

a fine of not more than $5000;

imprisonment of not more than six months; or

both.


Can a member vote by mail?

The articles or bylaws of a corporation may allow the members of a corporation to cast a ballot

or decide an issue that members are eligible to vote on by mail. The method of collecting,

counting and reporting the mail ballots will be set out in the articles and bylaws.

Sections 141 of the Act

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Office of Public Registry Administration [email protected]/documents/9/104139-Fact Sheet_Non-Profit... · A meeting of members, a class of members or