Amendment to Ontario's Corporations Act Provides Temporary AGM Flexibility


peter murphy headshotA new law provides Ontario not-for-profit corporations temporary flexibility to schedule and conduct AGMs in the pandemic and post-pandemic period. The new law will expire 120 days after the end of Ontario's current state of emergency. As of the date of this article, Ontario's state of emergency is set to expire on June 30, 2020.

Each not-for-profit incorporated under Ontario law (a "Corporation") must look to its constating documents and the Corporations Act to determine the rules it must follow when scheduling and conducting its annual general meetings (AGM) and directors meetings.

Absent the new law, Corporations are required to hold their AGMs no more than 15 months after their previous AGM, and the financial statements presented at the AGM must be for the last fiscal period which must have ended no more than 6 months ago.

As long as the new law remains in force, however, Corporations must hold their AGMs no more than 15 months after their previous AGM and provide financial statements for the last year ending before the AGM. If this results in the Corporation being required to hold their AGM during Ontario's emergency period, then it may hold its AGM no later than 90 days after the end of Ontario's declared emergency period: Where the 15 month period ends within 30 days after the emergency period is terminated, the AGM must be held no later than the 120th day after the day the emergency period is terminated.

Absent the temporary law, Corporations that want to hold directors' meetings and members' meetings, including AGMs, by telephone or through online platforms like Zoom must ensure their constating documents permit this. Until recently, most Corporations' constating documents did not provide for electronic meetings. Many Corporations' constating documents permit directors' meetings to be held by conference call, but do not extend to new audio-visual online platforms and do not apply to AGMs and special member's meetings.

Under the new law, Corporations may hold members' meetings and directors' meetings electronically, despite any conflicting provisions in the Corporation's constating documents. As a result, no by-law amendments are required for Corporations to hold electronic directors and members meetings, including AGMs, but only as long as the temporary law remains in effect.

Once the new law expires, Corporations will have to ensure their constating documents permit electronic directors and members meetings if they want to continue to hold these meetings electronically. Given that no COVID-19 vaccine is expected to be available for quite some time, Corporations should review their constating documents now and amend them, if necessary, to ensure these meetings may continue to be held electronically after the new law expires.

This article is provided as general information and does not constitute legal advice. If you have any particular legal questions, please contact us.