Bill or Act:
Business Corporations Act; Corporations Act; Condominium Act, 1998; Co-operative Corporations Act; Corporations Information Act; Limited Partnerships Act; Not-for-Profit Corporations Act, 2010; etc.
Summary of Proposal:
On May 12, 2020, the Legislature passed the COVID-19 Response and Reforms to Modernize Ontario Act, 2020 which, among other things, included temporary legislative amendments to the Corporations Act, the Business Corporations Act, the Co-operative Corporations Act, and the Condominium Act, 1998 to allow for virtual meetings and the deferral of annual meetings in some circumstances in response to the COVID-19 pandemic.
Since that time, the Legislature has passed similar amendments respecting virtual meetings to the Not-for-Profit Corporations Act, 2010, and regulations were made to extend the expiry date of temporary legislative amendments related to virtual meetings. The temporary relief framework is currently set to expire on September 30, 2022.
The Ministry of Government and Consumer Services (the ministry) previously held public consultations regarding potential permanent changes or further temporary changes to the various business law statutes and to the Condominium Act, 1998 in relation to virtual processes. These changes would help businesses adapt to new ways of doing business that are more virtual and allow for broader participation.
The ministry is now seeking public and stakeholder feedback on draft proposed legislative and regulatory amendments to various business law statutes and the Condominium Act, 1998. The draft proposed amendments are intended to facilitate virtual processes for businesses and condominiums. This posting will close by 11:59 pm on January 21, 2022.
In general, the draft proposed amendments would, as applicable:
1. Set a default rule that corporations may hold virtual or hybrid meetings unless the constating documents provide otherwise, and to remove the requirement for unanimous consent from directors in order to hold hybrid or virtual directors' meetings.
2. Set a default rule that votes and elections may be conducted virtually, unless a corporation opts out in their constating documents, and to clarify that hybrid voting/elections are allowed.
3. Permit notices to directors, shareholders and members to be sent by electronic means in accordance with the Electronic Commerce Act, and to address waiver of notice and abridgement of time, including sending by electronic means to harmonize the rules across the business statutes as appropriate.
4. Permit affected corporations and/or partnerships to store records by electronic means and facilitate the electronic examination/inspection of records, as applicable.
The draft proposed amendments are intended to help remove statutory barriers to certain corporations holding virtual and hybrid meetings etc. while continuing to support the self-governance of corporations and help align Ontario with other provinces in this regard.
The ministry welcomes feedback on the draft proposed amendments. Respondents may provide feedback with regard to any of the affected statutes, including by providing responses to the questions attached, and are asked to indicate in their response to which statutes their comments apply.
Analysis of Regulatory Impact:
January 4, 2022
Comments Due Date:
January 21, 2022
56 Wellesley St. W.,
Toronto, ON M5S 2S3