By Ryan Ghuman, Associate - Business Law

As a result of the ongoing COVID-19 outbreak, the Government of Ontario passed Bill 190, the “COVID-19 Response and Reforms to Modernize Ontario Act, 2020” on May 12, 2020, with several important temporary and permanent legislative amendments intended to support corporations and businesses through the pandemic.

Bill 190 was passed to provide relief and flexibility to corporations struggling to comply with rules and procedures relating to meetings and business operations during the COVID-19 outbreak. These changes will enable corporations and businesses to continue to function during the global pandemic, while still adhering to public health guidelines and legal requirements. The summary provided below outlines the key announcements relating to corporations and businesses as set out in Bill 190:

Electronic Copies, Signatures, and Filings

The Alternative Filing Methods for Business Act, 2020, enacted under Schedule 1 of Bill 190, permits the alternative filing of electronic signatures on certain corporate and business documents. It also further permits the alternative filing of copies of certain corporate and business documents where originals were previously required to be filed by in-person delivery or mail. Accordingly, businesses and not-for-profits may now submit copies of articles, applications, and other business documents, along with documents signed by electronic signatures instead of original signatures as part of their filings.

As a result of this legislative enactment, the Government of Ontario enacted corresponding amendments relating to electronic signatures, document copies, and electronic filings within the following corporate and business statutes: Ontario Business Corporations Act (OBCA), Business Names Act (BNA), Corporations Act (CA), Corporations Information Act (CIA), Co-operative Corporations Act (CCA), Limited Partnerships Act (LPA), and Extra-Provincial Corporations Act (EPCA).

Ontario Business Corporations Act (OBCA)

In conjunction with the enactment of the Alternative Filings Methods for Business Act, 2020, Section 267 of the OBCA has been permanently amended to permit the filing of electronic copies of articles, applications, and other documents to be filed under the OBCA, in place of originals filed by in-person delivery or mail. These amendments, effective as of May 12, 2020, are intended to remain permanent and will continue after the conclusion of the declared emergency.

In addition to the previous amendments, a new “Part XIX – Special Rules During Emergency” has been temporarily added to the OBCA, retroactive to March 17, 2020, and provides that certain provisions of the OBCA are temporarily suspended and replaced by provisions previously set out in Emergency Order O. Reg.107/20. These replacement provisions address, among other things:

• Extending the time period in which the directors of a corporation must call an annual meeting of the shareholders.
  • Under Section 94(1)(a) of the OBCA, the directors of a corporation are required to call an annual meeting of the shareholders not later than 18 months after the corporation comes into existence and subsequently not later than 15 months after holding the last preceding annual meeting.
  • Now, for the duration of the temporary suspension period:
    • If the last day on which an annual meeting of the shareholders is required to be held under Section 94(1)(a) is a day that falls within the period of the declared emergency, then the last day on which the meeting is required to be held is now no later than the 90th day after the day the emergency is terminated.
    • If the last day on which an annual meeting of the shareholders is required to be held under Section 94(1)(a) is a day that falls within the 30-day period that begins on the day after the day the emergency is terminated, the last day on which the meeting is required to be held is now no later than the 120th day after the day the emergency is terminated.
• Permitting a meeting of the shareholders by telephonic or electronic means, despite any provision in the articles, by-laws or a unanimous shareholder agreement that provides otherwise;
• Permitting a meeting of the directors by telephone, electronic, or other communication facilities that permits all persons participating in the meeting to communicate with each other simultaneously and instantly, despite any provision in the articles, by-laws or a unanimous shareholder agreement that provides otherwise; and
• Prescribing certain information to be laid prior to an annual meeting of shareholders held on a date that is in the period that begins on March 17, 2020, and ends on the 120th day after the day the declared emergency is terminated.
  • Under Section 154(1)(a) of the OBCA, in the case of a corporation that is not an offering corporation:
    • The directors shall place before each annual meeting of the shareholders the financial statements for the period that began on the date the corporation came into existence and ended not more than six months before the annual meeting or, if the corporation has completed a financial year, the period that began immediately after the end of the last completed financial year and ended not more than six months before the annual meeting.
    • Now, for the duration of the temporary suspension period, the directors shall place before each annual meeting of the shareholders the financial statements for the period that began on the date the corporation came into existence and ended before the annual meeting or, if the corporation has completed a financial year, the period that began immediately after the end of the last completed financial year and ended before the annual meeting.
  • Under Section 154(1)(b) of the OBCA, in the case of a corporation that is an offering corporation:
    • The directors shall place before each annual meeting of the shareholders, the financial statements required to be filed under the Securities Act and the regulations thereunder relating separately to, (i) the period that began on the date the corporation came into existence and ended not more than six months before the annual meeting or, if the corporation has completed a financial year, the period that began immediately after the end of the last completed financial year and ended not more than six months before the annual meeting, and (ii) the immediately preceding financial year, if any.
    • Now, for the duration of the temporary suspension period, the directors shall place before each annual meeting of the shareholders, the financial statements required to be filed under the Securities Actand the regulations thereunder relating separately to, (i) the period that began on the date the corporation came into existence and ended before the annual meeting or, if the corporation has completed a financial year, the period that began immediately after the end of the last completed financial year and ended before the annual meeting, and (ii) the immediately preceding financial year, if any.

These temporary provisions, retroactive to March 17, 2020, are intended to remain in place for a period that ends on the 120th day after the day the declared emergency under the Emergency Management and Civil Protection Act is terminated, unless otherwise prescribed in the OBCA.

Co-operative Corporations Act (CCA) and Corporations Act (CA)

Similar to the amendments made under the Ontario Business Corporations Act (OBCA), the Province of Ontario has also adopted temporary emergency measures, retroactive to March 17, 2020, under each of the Co-operative Corporations Act (CCA) and the Corporations Act (CA). These emergency amendments are intended to replicate the provisions previously set out in Emergency Order O. Reg.107/20 and to remain in place for a period that ends on the 120th day after the day the declared emergency under the Emergency Management and Civil Protection Act is terminated, unless otherwise prescribed.

The CCA now permits holding virtual meetings of members, shareholders, and directors through telephonic or other electronic means, regardless of whether the articles or by-laws of a co-operative so provide. All in-person voting requirements of members has also been temporarily suspended. Furthermore, the temporary amendments to the CCA provide for the granting of time extensions for annual meetings of the members and prescribe certain financial information to be laid prior to such annual meeting, including:

1. Financial statements,
2. Statements of profit and loss,
3. Statements of surplus,
4. Statements of patronage returns allocated to members during the year,
5. Statements of source and application of funds, and
6. Balance sheets.

The CA now permits for the holding of virtual meetings and voting of members, shareholders, and directors, despite any provision in the letters patent, supplementary letters patent, or by-laws of the corporation that provides otherwise. The temporary amendments to the CA also provide for the granting of time extensions for the annual meetings of the shareholders or members, and prescribe certain financial information to be laid prior to such annual meeting, including:

1. Financial statements,
2. Statements of profit and loss,
3. Statements of surplus, and
4. Balance sheets.

Business Names Act (BNA)

In conjunction with the enactment of the Alternative Filings Methods for Business Act, 2020, Section 5 of the Business Names Act (BNA), which deals with the renewals of business name registrations, has been permanently amended effective as of May 12, 2020, to permit electronic signatures on the signing of forms and other documents required to be filed with the Registrar. Following this permanent amendment, a copy of a notice or other document required to be sent to the Registrar will also be deemed to satisfy any requirements under the BNA for an original to be sent to the Registrar. 

If you have any questions about managing your business through the COVID-19 epidemic, please contact Ryan Ghuman at rghuman@mindengross.com or call or email any lawyer in the Minden Gross LLP Business Law Group.​

For more of our COVID-19 Updates visit: https://www.mindengross.com/our-firm/covid-19-response