Modernization, simplification and a more robust protection for
shareholders – these are the major changes proposed by
Bill 63 - Business Corporations Act that modifies the
existing Québec Companies Act. Tabled in the
National Assembly of Québec on October 7, 2009, the bill
will affect some 300,000 companies in Québec and is the
first major reform to Québec company law since 1981. While
it incorporates many standard practices that exist elsewhere in
Canada, Bill 63 has the ambitious announced objective of making
Québec a national leader in corporate legislative framework.
To ensure that the legislation constantly evolves to reflect the
realities of modern corporate practice, the bill also provides that
the Business Corporations Act be updated every five
The following is a brief overview of the principal changes proposed
by the Business Corporations Act.
More Robust Protection For Minority
A minority shareholder who disagrees with a major change made
to the structure or the activities of the corporation will be able
to require that its shares be repurchased.
Shareholders will have the opportunity to table a
shareholders' proposal at annual meetings.
Shareholders will have new remedies in the event of abuse or
Shareholders will have the right to ask the Court for the
authorization to act in the name of the corporation (also known as
"representative action" and "derivative
The Court will now have vast remedial powers to deal with cases
of abusive or unjust acts on the part of the corporation or its
New Governance Rules
Codification of the duties of care, diligence, honesty and
A director will now have the right to present a defense of
reasonable diligence with respect to acts made in good faith within
the framework of his or her office.
Creation of a new system of disclosure of directors' and
The absence of a requirement of Canadian residence for the
directors is maintained under the new act.
Use of New Technologies
Shareholders and directors will now be able to participate and
vote remotely in their respective meetings by way of
The constitution and many administrative transactions will be
carried out online with the enterprise registrar.
Possibility of issuance of shares without certificate.
Clarification of the rules regarding the unanimous shareholder
A corporate entity constituted in another jurisdiction will
have the right to continue its existence under the new
A Québec corporation will have the right to continue its
existence in another jurisdiction.
Removal of the solvency and liquidity tests with respect to
granting financial assistance to shareholders.
Removal of certain financial tests for the payment of dividends
and the repurchase of shares.
Removal of the requirements for annual meetings and for the
nomination of an auditor in single shareholder corporations.
The transition to this new legislative system should be
relatively straightforward. A company constituted, continued or
resulting from an amalgamation under Part IA of the Québec
Companies Act will be automatically continued under the
Business Corporations Act on the date the law comes into
force. A company constituted, continued or resulting from an
amalgamation under Part I of the Québec Companies
Act will be required to send, within five years of the law
coming into force, articles of continuance to the enterprise
registrar. Companies that do not satisfy this requirement will be
dissolved as of that date.
The government anticipates that the new Business Corporations
Act will come into force in November 2011. Until then, we will
follow any legislative developments and will keep you informed of
same. We will also advise you of the seminars that will be offered
by our firm on this new law.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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