Impacts on Business Corporations of the Less Red Tape, Stronger Economy Act, 2023, S.O. 2023, c.9 (the “Act”)

By Mark D. Hazlett

Schedule 4 of the Act makes several amendments to the Business Corporations Act, R.S.O. 1990, c. B.16 (the “OBCA”). The bulk of these amendments are to make permanent the changes that were temporarily implemented to deal with COVID and worked well enough to become “the new normal”, while ending the remainder of the COVID changes.

A brief summary of some of the key highlights of these amendments is as follows:

1. The amendments allow individuals or entities to remotely inspect or examine specified records of an OBCA corporation at any time using any technology. This includes the ability to make copies or extracts of the records through remote means.
2. Meetings of shareholders or directors of an OBCA corporation can now be conducted entirely through telephonic or electronic means, or a combination of in-person and electronic attendance. The articles or by-laws of the corporation can specify the manner in which such meetings are held and any applicable requirements. For a shareholders' meeting held electronically, all participants entitled to attend must be able to reasonably participate. Similarly, a directors' meeting held electronically must ensure that all attendees can communicate with each other simultaneously and instantaneously.
3. If a meeting of shareholders or directors is entirely held through telephonic or electronic means, the notice for the meeting is not required to specify a physical location.
4. If a person has the option to attend a meeting of shareholders or directors electronically, the notice for the meeting must include instructions on how to attend, participate, and vote through such means.
5. Unless the by-laws state otherwise, voting at a meeting of shareholders can be conducted entirely through telephonic or electronic means or through a combination of electronic and in-person voting.
6. A corporation is now allowed to keep required records in any form. The provision regarding the admissibility of records as evidence is also amended to loosen requirements as to form/format.
7. Auditors of corporations, who have the right to attend and be heard at board meetings on matters related to their duties, are now entitled to receive notice of such meetings as well.
8. The Minister is given more authority to create regulations concerning the inspection and examination of specific records, as well as transitional matters.
9. Part XIX of the OBCA, which temporarily suspended certain provisions and introduced replacement provisions to help deal with the COVID-19 pandemic, has been repealed. The regulation extending the temporary suspension period is also revoked. This means, that other than as amended and/or implemented through this Act, those temporary provisions are no longer in effect.

Similar changes have been made in other Schedules of the Act to the Corporations Act, Corporations Information Act, Not-for-profit Corporations Act, Partnerships Act, and the Limited Partnerships Act. If one of these statutes governs your business organization, and you would like more information on how these and other amendments may impact you, please do not hesitate to reach out to Mark Hazlett, mhazlett@sorbaralaw.com, (365) 509-2029 ext. 101.