Act
Proclamation of most Business Corporations Act amendments made in the Better for People, Smarter for Business Act, 2020 (Bill 213)
Regulation Number(s):
Instrument Type:
Act
Bill or Act:
Business Corporations Act
Summary of Decision:
Amendments made to the Business Corporations Act, which were included in the Better for People, Smarter for Business Act, 2020 (Bill 213) will be in force as of July 5, 2021, including:
• Eliminating the requirement that, generally, at least 25% of a business corporations' directors be a resident Canadian;
• Generally lowering the approval threshold for a written shareholder resolution in lieu of a meeting for privately held corporations for certain actions requiring ordinary resolutions. The amendment would lower written shareholder approval threshold to at least a majority of the voting shares (instead of the current requirement for a unanimous vote of shares);
• Clarifying the types of shareholder decisions that require ordinary resolutions and addressing notice requirements for written ordinary resolutions passed at the lower threshold; and
• Other technical amendments to various provisions of the Act.
These amendments will help provide more flexibility for businesses, make it easier for people to do business in Ontario, and drive economic growth, investment and job creation in the province.
The amendments made to the Act in Bill 213 related to the repeal of the "resident Canadian" and "non-resident corporation" definitions and regulation-making power related to definition of "resident Canadian" are not yet in force.
• Eliminating the requirement that, generally, at least 25% of a business corporations' directors be a resident Canadian;
• Generally lowering the approval threshold for a written shareholder resolution in lieu of a meeting for privately held corporations for certain actions requiring ordinary resolutions. The amendment would lower written shareholder approval threshold to at least a majority of the voting shares (instead of the current requirement for a unanimous vote of shares);
• Clarifying the types of shareholder decisions that require ordinary resolutions and addressing notice requirements for written ordinary resolutions passed at the lower threshold; and
• Other technical amendments to various provisions of the Act.
These amendments will help provide more flexibility for businesses, make it easier for people to do business in Ontario, and drive economic growth, investment and job creation in the province.
The amendments made to the Act in Bill 213 related to the repeal of the "resident Canadian" and "non-resident corporation" definitions and regulation-making power related to definition of "resident Canadian" are not yet in force.
Analysis of Regulatory Impact:
There are no administrative costs anticipated for business as a result of removing existing residency requirements. There are no administrative costs anticipated for business as a result of generally lowering the approval threshold for written resolutions for decisions requiring ordinary resolutions for privately-held corporations. These amendments will help provide more flexibility and reduce burden for businesses, make it easier for people to do business in Ontario, and drive economic growth, investment and job creation in the province.
Further Information:
Information on Proclamation Date
Proposal Number:
21-MGCS019
Posting Date:
Summary of Proposal:
The Ontario Government is focused on ensuring Ontario has modern laws that facilitate a prosperous business climate and reduce burden on business.
To assist in developing recommendations on how to improve Ontario's business law statutes, the Ontario government established a short-term advisory body called the Business Law Modernization and Burden Reduction Council (the Council) in February 2019. The Council's mandate is to make recommendations to government on how to modernize Ontario's corporate and commercial statutes to support the government's commitment to reduce burden on business and foster a good business climate in Ontario.
From October 11 to November 26, 2019, the Ministry of Government and Consumer Services sought feedback on several recommendations made by the Council, including amendments to the Business Corporations Act such as removing the director residency requirement and lowering the shareholder approval threshold in certain circumstances to increase flexibility.
Legislative amendments were made to the Business Corporations Act in Schedule 1 of the Better for People, Smarter for Business Act, 2020 (Bill 213). These legislative amendments received Royal Assent on December 8, 2020. Most of these amendments will be in force as of July 5, 2021 including:
• Eliminating the requirement that, generally, at least 25% of a business corporations' directors be a resident Canadian;
• Generally lowering the approval threshold for a written shareholder resolution in lieu of a meeting for privately held corporations for certain actions requiring ordinary resolutions. The amendment would lower written shareholder approval threshold to at least a majority of the voting shares (instead of the current requirement for a unanimous vote of shares);
• Clarifying the types of shareholder decisions that require ordinary resolutions and addressing notice requirements for written ordinary resolutions passed at the lower threshold; and
• Other technical amendments to various provisions of the Act.
To assist in developing recommendations on how to improve Ontario's business law statutes, the Ontario government established a short-term advisory body called the Business Law Modernization and Burden Reduction Council (the Council) in February 2019. The Council's mandate is to make recommendations to government on how to modernize Ontario's corporate and commercial statutes to support the government's commitment to reduce burden on business and foster a good business climate in Ontario.
From October 11 to November 26, 2019, the Ministry of Government and Consumer Services sought feedback on several recommendations made by the Council, including amendments to the Business Corporations Act such as removing the director residency requirement and lowering the shareholder approval threshold in certain circumstances to increase flexibility.
Legislative amendments were made to the Business Corporations Act in Schedule 1 of the Better for People, Smarter for Business Act, 2020 (Bill 213). These legislative amendments received Royal Assent on December 8, 2020. Most of these amendments will be in force as of July 5, 2021 including:
• Eliminating the requirement that, generally, at least 25% of a business corporations' directors be a resident Canadian;
• Generally lowering the approval threshold for a written shareholder resolution in lieu of a meeting for privately held corporations for certain actions requiring ordinary resolutions. The amendment would lower written shareholder approval threshold to at least a majority of the voting shares (instead of the current requirement for a unanimous vote of shares);
• Clarifying the types of shareholder decisions that require ordinary resolutions and addressing notice requirements for written ordinary resolutions passed at the lower threshold; and
• Other technical amendments to various provisions of the Act.
Contact Address:
Policy, Planning and Oversight Division
6th Flr, 56 Wellesley St. W.
Toronto, ON
M7A 1C1
6th Flr, 56 Wellesley St. W.
Toronto, ON
M7A 1C1
Royal Assent Date:
December 8, 2020
Decision:
Approved