Annual General Meeting Considerations
Annual General Meetings (“AGM”) are a requirement for both Federal and Provincial Corporations. Physical distancing in the time of COVID-19 has left many Ontario corporations wondering how and when they should proceed with their annual meeting. Generally, the Business Corporations Act (Ontario) (“OBCA”), requires an AGM to be held within 15 months of the last preceding AGM.
Ontario Corporation Legislation
Extensions of Time
To take pressure off Ontario corporations to hold an AGM the government of Ontario enacted O. Reg 107/20. Effective March 17, 2020, if the deadline to hold an AGM falls within the period of the COVID-19 declared emergency, then the deadline to hold an AGM is extended to 90 days after the end of the emergency. For corporations whose deadline to hold an AGM falls within 30 days after the end of the emergency, then the deadline to hold an AGM is extended to 120 days from the end of the emergency.
Alternatives to In-person Meetings
In addition, O. Reg 107/20 provides that all meetings of directors and shareholders, including the AGM, may be held by telephone or electronic means (which would include video conferencing) and explicitly overrides any provision of the articles or by-laws of an Ontario corporation requiring Annual General Meetings to be held in-person.
Federal Corporation Legislation
Timelines for Meetings
What about federal corporations incorporated under the Canada Business Corporation Act (“CBCA”)? Corporations Canada recently stated that Canada corporations must still observe the statutory timelines, which require an AGM to be held within 15 months of the previous AGM and no more than six months after the corporation’s financial year-end.
Amendments to Corporate By-Laws
Further, the CBCA only permits virtual AGMs if the corporate by-laws (or, in more limited circumstances, the articles) permit the corporation to do so. For Canada corporations whose articles or by-laws prohibit virtual meetings or are silent on the issue to comply with their obligations under the CBCA and the public health requirements of social distancing, the board of directors should amend the by-laws to permit virtual meetings, with the change effective until the next meeting of shareholders or members (when the change can be confirmed or rejected by the shareholders).
The other option for Canada corporations is to delay the AGM, which not-for-profits can do by applying to Corporations Canada. Unfortunately, business corporations need court approval.
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* This article is for general informational purposes only and is not to be construed as legal advice. Please contact Edwards PC, Creative Law or another lawyer, if you wish to apply these concepts to your specific circumstances.