Unincorporated Non-profit Associations Act 2008

GOVERNANCE

Members

Becoming or ceasing to be a member

14(1) Except as otherwise provided in the governing principles of a nonprofit association,

(a) a person may be admitted, suspended or expelled as a member of the association only by a majority vote of the members; and

(b) the resignation, suspension or expulsion of a member does not relieve the member of any liability or obligation that he or she incurred as a member.

Membership is voluntary

14(2)No person may be made a member of a nonprofit association without his or her consent, and a person may resign from membership at any time.

Comment: Subsection (1) establishes default rules for the admission and resignation of members. As is the case for the other default rules in the Uniform Act, subsection (1) only requires a majority vote for the admission of a new member. A UNA may wish to set a higher requirement. Clause (b) confirms that the resignation, suspension, or expulsion of a member has no effect on the liability of a member to the UNA. Subsection (2) is intended to clarify that, even though the terms and conditions of membership can be set by a UNA’s governing principles, the governing principles cannot require any person to become or remain a member against that person’s wishes.

Derivation: Principles (35)–(36)

Membership decisions

15(1) Except as otherwise provided by an association’s governing principles,

(a) each member is entitled to one vote on each matter put to a vote at a meeting of members;

(b) matters to be decided by members are to be decided by a majority vote; and

(c) membership approval is required for

  • (i) a change in the association’s governing principles,
  • (ii) a merger under section 24, and
  • (iii) any transaction or activity outside the ordinary course of the association’s activities, including a sale, lease or other disposition of all or substantially all of its property.

Notice and quorum for meetings of members

15(2) A nonprofit association’s governing principles govern the notice and quorum requirements for meetings of members.

Comment: The purpose of this section is to establish a basic default framework for decision-making by the members of a UNA. Subsection (1) sets out a default list of matters that require member approval. Some of the matters listed in subsection (1) require supermajority approval under nonprofit corporation statutes. The Uniform Act does not take this position. If a UNA wishes to require a supermajority for any of these issues, then it may implement this requirement through its governing principles. Subsection (2) does not contain a default rule for notice of and quorum at a meeting of members, but it does give statutory recognition of those requirements as they are spelled out in a UNA’s governing principles.

Derivation: Principles (26), (30)

Member is not agent

16A member of a nonprofit association is not an agent of the association merely by reason of being a member.

Comment: This section is intended to clarify that a person’s status as a member of a UNA does not, in itself, make that person an agent of the UNA. Agency and the power to bind a UNA are the subject of general agency principles. Under agency law, the managers of a UNA would, in a typical case, be considered to have the apparent authority to bind the UNA for acts in the ordinary course of the UNA’s activities. So, a member who is also a manager should be considered to be an agent of the UNA. This conclusion is reached by virtue of the person’s status as a manager. Under general agency law, a member may have the actual authority to bind the UNA or may have apparent authority to bind the UNA because of the member’s established course of dealing with a third party or because of the doctrine of estoppel. In these cases, the member is not an agent of the UNA solely by virtue of being a member.

Derivation: Principle (27)

Membership not transferable

17 A membership in a nonprofit association is not transferable except as permitted by the association’s governing principles.

Comment: This rule corresponds to a basic position of the nonprofit or voluntary sector. A member is usually understood to be making a personal commitment that should not be transferable. If a specific UNA wishes to allow transfers, then they can be made in accordance with the UNA’s governing principles.

Derivation: Principle (37)

Managers

Selection or dismissal of managers

18(1)Except as otherwise provided by a nonprofit association’s governing principles, membership approval is required for the selection or dismissal of a manager.

Members as managers

18(2) If an association would otherwise have no managers, every member of the association is a manager.

Comment: This section provides default rules for the selection of managers. The word “selection” is used as a neutral term, embracing election, appointment, and other means of selecting an individual to be a manager of a UNA. The selection of managers is to be done in accordance with a UNA’s governing principles. If no selection has been made in accordance with the governing principles, or if a UNA has no governing principles covering this issue, then by default all the members of a UNA are managers. This may be appropriate for small UNAs, but larger UNAs will have an incentive to select their managers in accordance with their governing principles.

Derivation: Principle (28)

Rights, responsibilities and decisions of managers

19 (1) Except as otherwise provided by a nonprofit association’s governing principles,

(a) the managers of an association have equal rights in carrying out their responsibilities as managers; and

(b) differences among the managers are to be resolved by a majority of the managers.

Notice and quorum for meetings of managers

19 (2) A nonprofit association’s governing principles govern the notice and quorum requirements for meetings of its managers.

Comment: This section provides a basic default framework for decision-making by a UNA’s managers. The intent is that a UNA’s governing principles will provide for the type of managerial structure that the UNA wants to have. Clause (a) of subsection (1) provides that managers have equal rights in carrying out their managerial responsibilities. The nature of these responsibilities can be grasped from the definition of “manager” in section 1, which provides that a manager is an individual who actively manages or is responsible for supervising the management of a UNA. Clause (b) provides that the managers of a UNA have equal rights in carrying out their responsibilities. Both statements are default rules, which may be modified by a UNA’s governing principles.

Subsection (2) confirms that the governing principles of a UNA govern practical issues such as notice and quorum requirements for a managers’ meeting. The use of proxies at a managers’ meeting is not permitted at common law.

Derivation: Principles (29)–(30).

Manager’s duties of loyalty, good faith and care

20 A manager of a nonprofit association

(a) has the same duties of loyalty, good faith and care that a director or officer of a nonprofit corporation has under the laws of [enacting jurisdiction]; and

(b) is liable for a breach of any of those duties to the same extent that a director or officer of a nonprofit corporation would be liable under that law.

Comment: This section contains the duties of loyalty, good faith, and care that apply to a manager of a UNA. The section is geared to the duties that are set out in the enacting jurisdiction’s nonprofit corporation statute. This approach has been taken for two reasons. First, most of the issues that confront the managers of a UNA are essentially the same as the issues that confront the directors of a nonprofit corporation. Framing the duties applicable to managers in the same terms as the duties applicable to directors will ensure that the large body of jurisprudence that has built up around the corporate duties will be available to assist with interpretation of the UNA duties. Second, there is considerable variation in the statutory expression of these duties for nonprofit corporation directors across Canada.

This section is one of the few sections in the Uniform Act that is mandatory rather then default.

Derivation: Principles (31), (33)

Association may indemnify manager

21 (1) Subject to its governing principles, a nonprofit association may indemnify, or enter into an agreement to indemnify, a manager of the association to the extent that a nonprofit corporation may indemnify a director or officer of the corporation under the laws of [enacting jurisdiction].

Association may advance litigation expenses

21 (2) Subject to its governing principles, a nonprofit association may advance, or enter into an agreement to advance, an amount to a manager who is, or is about to become, a party to a legal or administrative action or proceeding to pay for expenses related to that action or proceeding pending its outcome, but only to the extent that a nonprofit corporation may advance an amount to a director or officer in similar circumstances under the laws of [enacting jurisdiction].

Association may obtain insurance

21 (3) A nonprofit association may purchase and maintain insurance for the benefit of a manager against any liability incurred by the manager in his or her capacity as a manager of the association.

“Manager” includes former manager

21 (4) In this section, “manager” includes a former manager.

Comment: The right to indemnification for nonprofit corporation directors varies greatly from jurisdiction to jurisdiction. Some statutes do not provide for indemnification, others only provide for indemnification with court approval, and still others take note of recent developments in litigation and authorize the advancement of defence costs. In view of this variety, subsections (1) and (2) are both tied to the statute governing nonprofit corporations in the jurisdiction.

Subsection (3) confirms that a UNA may purchase and maintain liability insurance for its managers. Subsection (4) gives the word “manager” an expanded definition for this section.

Derivation: Principle (34)

Access to Records

Access to records

22 (1) The members and managers of a nonprofit association and their agents and legal representatives are entitled, upon reasonable notice, to inspect and copy, at a reasonable time and location specified by the association, any records of the association that are material to their rights or obligations as members or managers, as the case may be.

Membership lists

22 (2) Despite subsection (1), no member is entitled to inspect or copy a list of members of the association unless he or she has provided a written undertaking not to use the information, or allow it to be used, except in connection with

(a) an effort to influence the voting of the members of the association; or

(b) any other matter relating to the affairs of the association.

Comment: The Uniform Act does not require a UNA to maintain books and records. If a UNA chooses to maintain books and records, then they must be made available to the members and managers in accordance with this section. The term “records” should be interpreted broadly, embracing both written and electronic data. Subsection (2) is included as a special rule applying to membership lists. Access to these lists has been an area of rising concern in the voluntary sector. A clear statutory rule helps to allay that concern.

Derivation: Principle (32)

Restrictions on access and use

23 A nonprofit association may impose reasonable restrictions on access to its records and on their use.

Comment: This section authorizes a UNA to impose reasonable restrictions on access to and use of its records. These restrictions will vary from case to case. In general, they may include restrictions such as making the records available only at specific location, limiting the time of access to business hours, and charging a reasonable fee for copies. Whether any given restriction is reasonable depends in large measure on the context in which it is imposed.

Derivation: Principle (32)

Next Annual Meeting

2018 Conference (Centennial)

Delta Hotel

Québec City, QC

August 12 - 16, 2018