COVID-19 Corporate Update
January 2021 Charity & NFP Law Update
Published on January 28, 2021

By Theresa L.M. Man

Order Extending AGM Deadlines for Federal Corporations Now Ended

Corporations Canada published a reminder to federal corporations on December 30, 2020, that the Order Respecting Time Limits and Other Periods Established By or Under Certain Acts and Regulations for which the Minister of Industry is Responsible (COVID-19) (the “Order”) has now ended. The Order previously extended the deadline for federal corporations, including those under the Canada Not-for-Profit Corporations Act (“CNCA”), to call annual general meetings (“AGMs”) and present financial statements, and applied during the period between March 13, 2020 and December 31, 2020.

Commencing on January 1, 2021, federal corporations will therefore return to “business as usual” with respect to the timing of their AGMs, following the normal rules set out in their incorporating legislation. For CNCA corporations, this means holding an AGM no later than 15 months after the previous AGM, and no more than six months after the last financial year-end.

Corporations Canada’s announcement states that it is unsafe to hold in-person AGMs during the COVID-19 outbreak because it would contradict public health advice to practice physical distancing and self-isolation to prevent the spread of the virus.

Corporations Canada reminded corporations that depending on the by-laws, a corporation could have two possibilities to hold electronic AGMs:

• Virtual meetings where all participants attend exclusively through a digital channel that allows participants to communicate adequately with each other during the meeting. Virtual meetings must specifically be in the corporation’s by-laws.

• Hybrid meetings (i.e., partially virtual meetings) where some participants attend in-person and others participate through a digital channel that allows participants to communicate adequately with each other during the meeting. A hybrid meeting may be held if (i) they are not prohibited by by-laws, or (ii) the by-laws are silent and thereby may be held by default under the CNCA.

Corporations Canada then states that “if the corporation’s by-laws prohibit virtual meetings or are silent on holding them, the board of directors may change the by-laws with the change effective until the next meeting of shareholders or members (when the change can be confirmed or rejected).” However, Corporations Canada fails to point out that this option does not apply to those corporations that have a provision in their articles requiring by-law changes be subject to a special resolution of members before the by-law changes may take effect.

Corporations Canada also points out that for those corporations that have a small number of members, they can have the members sign a written resolution approving business items in lieu of holding an AGM. However, since this option requires the written resolution to be signed by all members in order to be valid, the practical application of this option is fairly limited.

Lastly, Corporations Canada points out that not-for-profit corporations may also apply to Corporations Canada to delay the calling of their AGM where calling the AGM within the normal timeframe would be detrimental. The application must be made at least 30 business days before notice calling the AGM is required to be sent to members online or by email to IC.corporationscanada.IC@canada.ca.

Read the January 2021 Charity & NFP Law Update