Every year, non-profit organizations in Quebec must prepare and hold an annual general meeting (AGM). Here’s what you need to know about AGMs in order to fulfill your legal obligations and ensure a smooth-running meeting.
|
Important! The information in this article only applies to incorporated non-profits created under Quebec law. To learn more about federally incorporated non-profits, check out our article Non-profits: Incorporate With the Quebec Government or the Federal Government? or Corporation Canada’s website. Note that the law allows Quebec non-profits to put different rules in their letters patent or by-laws in certain cases. If non-profits do this, the rules in these documents apply to it instead of the legal rules described in this article. |
What is an AGM?
An AGM is a meeting for the members of the non-profit. In this meeting, they
- receive information about the board of directors’ management,
- receive financial documents,
- hold the directors accountable, and
- vote for new directors and other matters if necessary.
Members can also choose to appoint an auditor during the AGM.
Who runs the AGM ?
The person who plans and runs the AGM is usually the chairperson of the meeting. However, if the non-profit doesn’t have a chairperson, or if they are absent, the president can take on their responsibilities.
AGM Checklist – What you need to prepare
- Check when the AGM should be held
The by-laws or letters patent generally state when you must hold the AGM. The by-laws can provide a specific date, but more commonly they state a range of acceptable dates. If that’s the case, the board gets to choose the date of the AGM, provided it falls within this range.
If the by-laws don’t address this point, you must hold the AGM on the 4th Wednesday in January. If this day is a holiday, you must hold the AGM on the next working day.
|
If you get to choose the date of your AGM… Keep in mind that the balance sheet you present at the AGM must be less than 4 months old. To follow this rule, you can hold your AGM within 4 months of the fiscal year-end. Alternatively, you can hold the AGM later and prepare an additional balance sheet that is more recent. |
- Check the location
Generally, you’ll find this information in the letters patent or the by-laws.
Otherwise, you must hold the AGM in Quebec. More specifically, the AGM must be held in the same municipality as the head office of your non-profit.
If you wish to hold the AGM in another place, you must get the new location approved by all the members12. You can do this even if your letters patent or by-laws already specify a location.
You can also hold an AGM remotely or in hybrid mode, so long as your by-laws or letters patent don’t prohibit it. However, you must make sure that all the participants can communicate with one another directly.
- Send notice of the AGM
The secretary or a board member must send notice of the AGM to all the members.
In this notice, you must include the date, time and location of the AGM, as well as a mention that the meeting will be an Annual General Meeting of the members.
This notice must go out to members at least 10 days before the AGM. You must send it via registered mail and ensure that it’s published in a newspaper distributed within your non-profit’s municipality.
However, check your by-laws as they may contain a different set of instructions and timelines for sending notice.
|
Meeting Agenda It’s good practice to have a meeting agenda, which is a roadmap of the points you want to cover. Doing this ensures that you won’t forget any of the actions you are legally obliged to take, such as presenting the balance sheet to the members. It’s also generally done as a courtesy to the members. You can send the meeting agenda at the same time as the notice for the AGM. |
- Prepare the important documents
During the AGM, you will have to present specific documents to your members. As such, it’s important to prepare them beforehand.
These documents are
- the balance sheet at the fiscal year-end,
- an interim balance sheet, if the AGM is scheduled more than 4 months after your fiscal year-end,
- an annual financial statement (from the fiscal year-end),
- the auditor report, if applicable, and
- internal rules adopted by the board or officers.
Nothing prevents you from preparing and presenting other documents that you want to bring to members’ attention.
AGM Checklist – During the AGM
- Before you start the meeting, make sure you have quorum.
Quorum is the minimum number of members you must have present at the AGM.
The by-laws typically specify how many members you need to reach quorum. If they don’t, the default quorum is set by law as the majority of all voting members. For instance, for a non-profit with 200 voting members, you would need 101 voting members to show up at the AGM in order to have quorum.
You have to maintain quorum throughout the AGM, unless your by-laws specifically state that this is not necessary. Otherwise, the decisions you take during the AGM will not be valid: it’s as if they were never made .
- Start the meeting and follow the AGM agenda
Once you have enough people at the meeting to reach quorum, you can officially start the AGM.
If you have a meeting agenda, you can start the AGM by addressing the first point on the agenda.
The meeting doesn’t have to be formal. The chairperson usually follows well-known procedural rules such as Robert’s Rules of Order, but the way they lead the meeting is up to their discretion. However, if the by-laws ask that they conduct the meeting in a specific way, then they must do so.
You have to make sure that someone is taking minutes of the meeting. Minutes are written notes of the discussions that take place and the decisions made. Usually, the secretary of the non-profit handles this task, but they can delegate it to someone else.
- Know who can vote
During the AGM, members will likely be called to vote on specific questions, such as who the next directors should be.
Members typically vote by show of hands but can request a ballot vote if they want to keep the vote confidential. This request should be granted, unless the by-laws allow the chairperson to refuse it.
Make sure that only the people who are entitled to vote do actually vote! By default, every member has the right to vote. However, review your by-laws as they may create different categories of members, some with voting rights and others with none. If this is the case, only voting members are allowed to vote at the AGM.
- Know your non-profit’s voting rules
Once members vote, how do you know if a decision has been reached (or “passed”)?
A minimum number of members must have voted in favour of the decision for it to pass. Your by-laws can provide what this minimum number is.
If they don’t, but your by-laws set quorum, then you need at least 50%+1 of this quorum to vote in favour of the decision for it to pass. For example, if your non-profit has 20 voting members, and your by-laws set quorum at 11 voting members, then your decision needs the support of 6 voting members to pass (since 50%+1 of 11 is 6).
If your by-laws don’t set quorum, then you need 50%+1 of all voting members to vote in favour of the decision. For example, if your non-profit has 20 voting members, then you need 11 voting members to vote for a decision for it to pass.
In the event of a tie, the chairperson of the meeting gets the deciding vote. Here again, your by-laws may provide for something different39.
- Adjourn the meeting
Once you’ve covered all the discussion points, members must vote to adjourn the meeting. The AGM then officially comes to an end.
After the meeting, the president or the secretary signs the minutes. The minutes must be added to the non-profit’s records.
|
Did you know? If members unanimously agree on a decision, they don’t need to hold a meeting to vote on the matter. They can write their decision and have every voting member sign it. This is known as a “written resolution.” The non-profit must keep a copy of these written resolutions in its records. |