Under the Canada Business Corporations Act and the Canada Not-for-profit Corporations Act, federally incorporated businesses and not-for-profit corporations are required to hold an annual general meeting of shareholders and members within 15 months of the previous annual general meeting (AGM) and no more than 6 months after the organization’s last financial year-end.
Recognizing that holding in-person AGMs during the COVID-19 pandemic would be in direct contradiction to public health advice to practice physical distancing and avoid large gatherings, Corporations Canada had released an educational guidance document outlining options for federal corporations to consider to remain compliant with their legislative obligations. The options outlined included holding virtual meetings or partial virtual meetings, subject to a corporation’s by-laws, in addition to allowing not-for-profit corporations to apply to delay calling their AGM when it would be detrimental to call the meeting within the normal timeframe.
Corporations Canada has recently updated its educational guidance document “Annual meeting of federal corporations during the COVID-19 outbreak” to provide additional guidance for federal businesses and not-for-profit corporations regarding the holding of AGMs during the COVID-19 outbreak, which includes:
- Signing a written resolution in lieu of holding an AGM.
The guidance document notes that this is a practical option for corporations with a small number of shareholders or members. The written resolution must include the business items normally communicated at the AGM and at a minimum includes the following: electing directors; considering the corporation’s financial statements; appointing the corporation’s auditor or public accountant, or deciding to waive the appointment of an auditor or public accountant. The written resolution must be signed by all shareholders or members who are entitled to vote at the AGM. The signed resolution should be kept with the corporation’s records.
- Providing a link to a simple online application for not-for-profit corporations who want to delay calling their AGM.
Not-for-profit corporations are asked to apply at least 30 business days before the date of notice calling their AGM under normal circumstances would be sent. Once the application to delay the AGM is approved, a not-for-profit corporation must call its AGM before October 31, 2020, and hold it before December 31, 2020. Other federally incorporated businesses will need court approval to delay their own AGMs.
In Our View
Jurisdictions across Canada have taken different approaches in addressing the public health concerns raised by in-person meetings of shareholders, members, and directors.
Emond Harnden LLP’s Not-For-Profit Governance Group will continue to monitor the ongoing changes to both the provincial and federal corporate governance regimes as it becomes available to assist corporations in navigating the ongoing pandemic. For further questions regarding not-for-profit governance at the federal or provincial level, please contact Raquel Chisholm at 613-940-2755 or Céline Delorme at 613-940-2763.
