Amendments to the OBCA Reflect Modern Business Practices
The world of business doesn’t stand still and neither does the legislation that supports it. Amendments to the Ontario Business Corporations Act (OBCA) came into force via Bill 91, Less Red Tape, Stronger Economy Act, 2023, on October 1, 2023, providing for updates that reflect modern business practices in today’s tech-driven environment.
From Zoom and Teams meetings to sharing documents through email and in data rooms, we’re seeing a shift towards using digital tools in the day-to-day work of corporate governance.
For personalized guidance on how the recent OBCA amendments might impact your business, contact South Hill Law.
The updates are as follows:
1. Remote Inspection of Corporate Records: Corporations can now allow directors, shareholders, or creditors to remotely inspect certain consents using any technology, and if remote inspection or copying is permitted, no fees can be charged for these services. (s. 5 (2.1.1 and 2.1.2))
2. Meetings via Electronic Means: The Act has been amended to facilitate meetings of shareholders to be held entirely through telephonic or electronic means, or a combination of virtual and in-person attendance. This includes provisions for ensuring all attendees can reasonably participate and are considered present. It also allows for specifying requirements and limitations in the articles or by-laws regarding the conduct of such meetings. (s.94(2))
3. Notice Requirements for Meetings: For meetings held entirely via telephonic or electronic means, specifying the physical place of the meeting in notices is no longer required. Notices must include instructions for attending and participating in the meeting electronically, including voting. (s.96(1.1))
4. Remote Examination of Shareholder Lists: Corporations or their agents may permit remote examination of the list of shareholders at any time using any technology. (s. 100(5))
5. Voting Mechanisms: Voting at shareholder meetings can now be conducted entirely through telephonic or electronic means unless expressly prohibited by the by-laws. (s. 103(2.1)
6. Director Meetings and Notifications: Similar amendments have been made to facilitate director meetings through electronic means, including changes in notice requirements and the allowance for remote attendance and participation. (s. 117 (5), s. 124, s. 126, s. 139)
7. Record Keeping and Evidence Admissibility: Corporations may keep required records in any form, and such records are admissible in evidence as proof of stated facts, enhancing flexibility in corporate record-keeping. (s. 139)
8. Electronic Communications: Aligning with the Electronic Commerce Act, 2000, the amendments facilitate sending notices or documents by electronic means. (s.262(6))
9. Regulatory Powers and Repeals: New regulatory powers have been added to govern inspections, examinations, and other transitional matters necessary for implementing these amendments. Additionally, parts of the Act and certain COVID-19 related temporary measures have been repealed. (repealed ss. 21-23)
Please reach out to us if you’d like to discuss how these changes to the OBCA may effect how you run your corporation or your rights and obligations as a shareholder or a director.
