After over forty years, the legislative framework that governs business corporations in Saskatchewan has changed. On March 12, 2023, The Business Corporations Act, 20211 (the "SBCA") and The Business Corporations Regulations, 20222 (the "Regulations") came into force. This new legislation aims to simplify existing processes, modernize the legislative framework, and improve flexibility for Saskatchewan corporations.
Key features of the SBCA and Regulations include:
1. Indigenous Corporate Names in the Corporate Registry
Corporate names in Indigenous languages like Cree, Dené, Michif, Lakota, Nakota, Dakota, or Saulteaux, including special characters, will be accepted in the Corporate Registry.3
2. Individuals with Significant Control
The SBCA and the Regulations implement new rules surrounding individuals with significant control over a corporation.4 Further information on this change will be provided in a subsequent blog post.
3. Removal of the Canadian Residency Requirement
The SBCA and the Regulations remove the requirement that twenty-five per cent (25%) of the directors be Canadian to transact business at a meeting of directors, or to satisfy committee membership requirements.5
Instead, where none of the directors or officers of a corporation reside in Saskatchewan, the corporation shall now appoint a power of attorney in compliance with Part 20-17, as if the corporation were an extraprovincial corporation.6
4. Removal of Directors
The SBCA permits a person who manages or supervises the management of the business and affairs of the corporation, to become a director if all directors of the corporation have resigned or have been removed without replacement.7
However, this allowance will not apply to an officer who manages the business or affairs of the corporation under the direction or control of a shareholder or other person. Nor does this allowance apply to a lawyer, notary, accountant, or other professional who participates in management solely for the purposes of providing professional services, or a trustee in bankruptcy, receiver, receiver-manager, or secured creditor who participates in management solely for the purpose of realization of security, or administration of bankrupt's estate.8
5. Duty of Care of Directors and Officers
The SBCA now expressly states that every director and officer of a corporation shall exercise their powers and perform their duties by acting honestly and in good faith with a view to the best interests of the corporation.9
To aid directors and officers, the SBCA provides a non-exhaustive list of factors they may consider when acting with a view to the best interests of the corporation. These include the interests of shareholders, employees, retirees and pensioners, creditors, consumers, governments, matters respecting diversity, the environment, and the long-term interests of the corporation.10
6. Director and Officer Liability on Summary Conviction
The SBCA has a new summary offence provision under Part 22. Notably, the previous maximum fine of $5,000 has been increased to $10,000.11
7. Use of Electronic Documents / Signatures and Means of Communication
Throughout the SBCA, there is an increased authorization of electronic technology. For instance, signed resolutions can now be executed via electronic signature,12 as defined in The Electronic Information and Documents Act, 2000,13 subject to any exclusions therein.
Moreover, attendance and participation in meetings, including voting, can be facilitated by means of telephonic, electronic, or other communication facility that permits all participants to communicate adequately with each other during the meeting, unless the corporations' bylaws state otherwise. This includes shareholder meetings.14
8. Notice of Shareholder Meeting
The SBCA permits a corporation to meet the shareholder notice requirements by posting the relevant notice and records on a website or in an internet file hosting service if shareholders can access it for free and have received a notice explaining how to access it. A corporation may also send notice via electronic communication where the shareholder has consented, the articles provide for notice via electronic communication, or where a publicly traded company meets requirements of Saskatchewan securities law.15
9. Saskatchewan Gazette
The SBCA removes the requirement and cost to post public corporate events in the Saskatchewan Gazette.
1. The Business Corporations Act, 2021, SS 2021, c 6 [new SBCA].
2. The Business Corporations Regulations, 2022, Sask Reg 91/2022 [Regulations].
3. See new SBCA, supra note 1, s 2-7(3); Regulations, supra note 2, s 3(8)(2).
4. See especially new SBCA, supra note 1, s 1-3 and ss 4-4 through 4-7. See also Regulations, supra note 2, Part 10.
5. See new SBCA, s 9-15 and 9-16. See also prior provisions in The Business Corporations Act, RSS 1978, c B-10, ss 100(3) and 109.
6. See new SBCA, supra note 1 requirement at s 9-6. See also ibid, s 20-17 for the process of appointing a power of attorney.
7. See ibid, s 9-10(4).
8. See ibid, s 9-10(5).
9. See ibid, s 9-23(1).
10. See ibid, s 9-23(2).
11. See ibid, s 22-21.
12. See e.g. ibid, s 9-18.
13. The Electronic Information and Documents Act, 2000, SS 2000, c E-7.22.
14. See e.g. new SBCA, supra note 1, ss 11-1 and 11-10
15. See ibid, s 11-4.
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.