Publié à l'origine le 27 avril 2020; dernière mise à jour le 13 mai 2020 pour refléter l'adoption du Projet de loi 190, Loi de 2020 sur les mesures en réponse à la COVID-19 et les réformes visant à moderniser l'Ontario par le gouvernement de l'Ontario.

Une traduction de ce billet sera disponible prochainement.

The Government of Ontario has added a new Part XIX to the Business Corporations Act (Ontario) (OBCA) to provide, among other things, the suspension and replacement of provisions of the OBCA in respect of virtual meetings, requirements to re-issue notices of meetings and to present financial statements at annual meetings within a specified period.

Pursuant to Bill 190, COVID-19 Response and Reforms to Modernize Ontario Act, 2020 (the Bill), the Government of Ontario has revoked its April 24, 2020 order under the Emergency Management and Civil Protection Act (Ontario) (the Order) and adopts provisions to temporarily extend the deadline for annual shareholder meetings and allow issuers to hold virtual-only board and shareholder meetings, regardless of their articles and bylaws, as we had previously discussed. As was the case under the Order, the Bill provides greater certainty for OBCA-corporations with regard to the timing, format and procedures of annual shareholders meetings in 2020, in response to the COVID-19 pandemic. Similar provisions have also been adopted under the Bill for corporations under the Corporations Act (Ontario), the Co-Operative Corporations Act (Ontario) and the Condominium Act (Ontario).

Annual Financial Statements

The OBCA requires that financial statements, any related auditor's reports, and, where applicable, further financial information be laid before shareholders at each annual meeting. Such financial statements and other information must pertain to the period commencing either on the day the corporation came into existence or immediately following the end of its last completed financial year and ending not more than six months before the annual meeting. As a result, the directors of an OBCA-corporation are generally required to call an annual meeting for a date not later than six months after the end of the immediately preceding financial year, as well as satisfy the general requirement to call a meeting no later than 15 months after the corporation's last annual meeting. While the Ontario Government had extended the meeting deadline under an emergency order on March 31, 2020, such order failed to address the financial statement requirement and left some ambiguity as to how corporations could both comply with the financial statement requirements and delay their meeting in 2020. The Bill addresses this issue by temporarily suspending the requirement that the financial information placed before an annual meeting pertain to a period ending not more than six months before such meeting.

Notice of Meeting

The Bill clarifies that an OBCA-corporation is not required to send a new or amended notice of meeting if it is changing the date, time or place of its meeting of shareholders to permit a virtual meeting, provided that the persons entitled to receive the notice are informed of the change in a manner and within a time that is reasonable in the circumstances. This requirement is consistent with the https://www.stikeman.com/en-ca/kh/canadian-securities-law/Looking-to-Change-Your-Meeting-Because-of-COVID19-CSA-Says-Go-For-ItCanadian Securities Administrators' recent guidance with regard to virtual shareholder meetings, which requires issuers changing the date, time, location or format of their shareholder meetings in the 2020 proxy season to issue a news release announcing the change and taking all reasonable steps to inform the parties involved in the proxy voting infrastructure.

Virtual Meetings

The Bill temporarily amends the provisions of the OBCA in respect of shareholder meetings to provide additional flexibility for corporations looking to hold virtual meetings by permitting shareholder meetings to be held by telephonic or electronic means, regardless of any provision in the corporation's articles or bylaws. However, the Bill further clarifies how voting should be conducted at a virtual meeting, by providing that the chair of a virtual meeting must conduct the vote by a show of hands or by a ballot, if feasible, and otherwise the chair may direct voting by alternate means, for example, in the case of an audio only meeting.

Meeting Deadline

As previously discussed, in light of the state of emergency declared in Ontario, the deadline to hold an annual meeting of shareholders has temporarily been extended for OBCA-corporations as follows (the extended meeting deadlines):

  • If the last day on which the annual meeting is required to be held falls during the time that the current declaration of emergency applies, the corporation may hold the meeting any time before the 90th day after the day the declaration of emergency is terminated.
  • If the last day on which the annual meeting is required to be held falls within the 30-day period that begins on the day after the day the current declaration of emergency is terminated, the corporation may hold the meeting any time before the 120th day after the declaration of emergency is terminated.

The Bill clarifies that the directors of an OBCA-corporation may call a meeting of shareholders to be held on a date contemplated by the extended meeting deadlines at a time that enables the corporation to comply with the extended meeting deadlines and that is reasonable in the circumstances. The Bill also clarifies that the date on which an OBCA-corporation was required to hold its annual meeting of shareholders for the purpose of determining whether the extended meeting deadlines will apply to the corporation should be based upon both the meeting deadline described in section 94 of the OBCA (i.e., within 15 months from the corporation's last annual meeting) and the financial statements required to be placed before the meeting (i.e., within 6 months of the issuer's year end).

Electronic Filings and Signatures

The Bill also amends the OBCA to permit for electronic signatures on certain documents, to permit for copies of certain documents to be used in place of originals and to accommodate alternative methods of filing under the Alternative Filing Methods for Business Act, 2020, which permits alternative means of filing and electronic signatures.

General

The amendments to the OBCA under the Bill are retroactive to March 17, 2020 and the Order is deemed to be revoked on the same date. The temporary suspension period under the Bill is the period of the emergency that was declared on March 17, 2020 under the Emergency Management and Civil Protection Act and a further period that ends on the 120th day after the day the declared emergency is terminated. If provided for by regulation for a particular section, the temporary suspension period may also include a further prescribed period of time immediately following the end of the 120-day period. Similar amendments to the Corporations Act (Ontario), the Co-Operative Corporations Act (Ontario) and the Condominium Act (Ontario) are provided for in the Bill.

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.