We are living in a time where there is great potential to improve business practices through the effective implementation of technology.
Upcoming amendments to the Companies Act1, Co-operative Associations Act2 and Corporations Registrations Act3 will permit the electronic storage of books and records for both companies and cooperatives. A number of other key updates include, facilitating director business by way of electronic meetings for co-operatives and authorizing the Registrar of Joint Stock Companies (Registrar) to issue electronic certificates.
Bill 197 was introduced by the Minister of Service Nova Scotia and Internal Services, Province of Nova Scotia, on the aim to modernize the legislation to eliminate costly and time-consuming past practices, and to provide companies with the choice to use the wealth of modern tools available to them.
Under the current regulatory regime, companies and co-operatives in Nova Scotia are required to maintain corporate records at their registered offices. This includes manually storing meeting minutes, members' registers, and director and officer details. These practices are burdensome not only to businesses, but also to professional advisers, including lawyers, who may serve as a recognized agent for Nova Scotia companies and co-operatives.
The amendments mean businesses will no longer have to purchase and maintain a physical minute book. Instead, they will have the opportunity to create, maintain, and store records electronically. It is hoped that this will facilitate quick and easy access to company records and will also help companies and co-operatives to avoid the costly and cumbersome practices associated with storing and maintaining a physical minute book.
As currently drafted, the proposed section 90B of the Companies Act requires that "reasonable precautions" are taken to "preserve and maintain the company's registers and records by preventing their loss or destruction, preventing false entries and facilitating the detection and correction of inaccuracies". It remains to be seen whether any specific guidance or clarity will be provided by the Province on what is entailed by "reasonable precautions".
Other amendments include provisions which enable the Registrar to issue electronic certificates of registration in the future. Additional amendments will enable the directors of co-operatives to hold meetings via electronic means, including teleconferences and Skype.
Both the Progressive Conservative and New Democratic parties supported the Liberal Bill which passed the third reading on October 29. Bill 197 received royal assent on October 30, and with the exception of Section 19 which must be proclaimed by the Governor in Council, it is now in effect.
For further queries, contact David Reid and Mohammad Ali Raza, partners in the Business Group of Cox & Palmer's Halifax Office. This article was written with contributions by Ashley Dickey, an Articled Clerk at Cox & Palmer.
This article originally appeared on The Lawyer's Daily website published by LexisNexis Canada Inc.
Footnote
1 Nova Scotia Companies Act, RS c 81, s 1.
2 Co-operative Associations Act, RS c 98, s 1.
3 Corporations Registration Act, RS c 101, s 1.
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