If passed, Bill 218, Burden Reduction Act, 2016 (the Bill) will make some small but welcome changes to corporate governance requirements for companies incorporated in Ontario. The Bill passed first reading in the Ontario legislature on June 8, 2016 and still has some steps to go before becoming law. However, it is hoped that the Bill will be passed during the legislative session which began earlier this month.
Currently, the Business Corporations Act (Ontario) (the OBCA) requires board meetings to be held at a corporation’s registered office. In the alternative, and only if allowed by a corporation’s by-laws, a board meeting can be held at another location, provided that the majority of board meetings are held within Canada. The Bill repeals these rules and replaces them with a provision which, subject to a corporation’s articles and by-laws, removes restrictions on the locations where a board meeting may take place.
As well, the Bill removes the requirement for two-fifths of directors to be present at board meetings. Subject to a corporation’s own articles and by-laws, the board meeting quorum requirement will be satisfied so long as a majority of directors are present or the minimum number of directors required by the corporation’s articles is present.
Shareholder Meetings and Addresses
The quorum requirement for shareholders’ meetings is also clarified by the Bill. The Bill states that a quorum for shareholder meetings is met so long as a majority of shares entitled to vote at the meeting are present in person or by proxy (and irrespective of the number of persons actually present at the meeting).
Finally, the Bill also amends the OBCA by requiring a corporation to include e-mail addresses in share registers if the corporation is provided with a shareholder e-mail address.
Further details about the Bill’s legislative progress found here.
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