Ontario Provides for Extension of Deadlines for AGM and Electronic Meetings

In response to the COVID-19 pandemic an emergency was declared in Ontario on March 17, 2020, under the Emergency Management and Civil Protection Act. The Ontario government has issued an order effective March 17, 2020 (the “Order”) that temporarily extends the deadlines for Ontario business and not-for-profit corporations to hold their annual meetings and allow for electronic meetings.

Business Corporations Act (“OBCA”)

Extension of Deadlines for AGM

Pursuant to s. 94(1)(a) of the OBCA, directors must call an annual shareholders meeting within 18 months after the corporation comes into existence, and subsequently, within 15 months after holding the last preceding annual meeting.

The Order provides that, despite s. 94(1)(a) of the OBCA:

• if the last day on which a meeting is required to be held is a day that falls within the period of the declared emergency, the last day on which the meeting is instead required to be held is not later than the 90^th day after the day the emergency is terminated; and
• if the last day on which a meeting is required to be held is a day that falls within the 30-day period that begins on the day after the day the emergency is terminated, the last day on which the meeting is instead required to be held is no later than the 120^th day after the day the emergency is terminated.

This means for example if the emergency is terminated on June 30th:

• if the annual meeting should have been held by May 30th, the annual meeting would be required to be held 90 days after June 30^th (being September 28^th, 2020)
• If the annual meeting should have been held by June 30^th, the annual meeting would be required by be held 120 days after June 30^th (being October 28^th, 2020)

Electronic Meetings

The OBCA allows corporations to hold a shareholders meeting by telephonic or other electronic means unless the corporation’s constating documents provide otherwise.

The Order provides, that despite any provision in the articles or by-laws that provides otherwise, a meeting of shareholders may be held by telephonic or electronic means and a shareholder who, through those means, votes at the meeting or establishes a communications link to the meeting shall be deemed to be present at the meeting.

The Order also provides that despite any provisions in the articles or by-laws that provide otherwise, a meeting of directors or a committee of directors, may be held by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously and a director participating in such a meeting by such means is deemed to be present at that meeting.

Corporations Act (“OCA”)

Extension of Deadlines for Meetings to Elect Directors

Pursuant to s. 159(1) of the OCA, a meeting of shareholders or members for the election of directors shall be held within the first three months of every year at such time and place as the by-laws prescribe.

The Order provides that despite s. 159(1) of the OCA, the meeting of shareholders or members for the election of directors required to be held in 2020 shall be held no later than the 90^th day after the day the emergency is terminated.

This means for example if the emergency is terminated on June 30^th, the meeting of shareholders or members for the election of directors would be required to be held by September 28^th, 2020.

Extension of Deadlines for Annual General Meetings

Pursuant to s. 293 of the OCA, a corporation shall hold an annual meeting of its shareholders or members not later than 18 months after the corporation comes into existence, and subsequently, within 15 months after holding the last preceding annual meeting.

The Order provides that, despite s. 293 of the OCA:

• if the last day on which a meeting is required to be held is a day that falls within the period of the declared emergency, the last day on which the meeting is instead required to be held is not later than the 90^th day after the day the emergency is terminated; and
• if the last day on which a meeting is required to be held is a day that falls within the 30-day period that begins on the day after the day the emergency is terminated, the last day on which the meeting is instead required to be held is no later than the 120^th day after the day the emergency is terminated

This means for example if the emergency is terminated on June 30th:

• if the annual meeting should have been held by May 30th, the annual meeting would be required to be held 90 days after June 30^th (being September 28^th, 2020).
• If the annual meeting should have been held by June 30^th, the annual meeting would be required by be held 120 days after June 30^th (being October 28^th, 2020)

Electronic Meetings

The Order provides that despite any provision in the letters patent, supplementary letters patent or by-laws of a corporation that provides otherwise, a meeting of members or shareholders may be held by telephonic or electronic means and a member or shareholder who, through those means, votes at the meeting or establishes a communication link to the meeting is deemed to be present at the meeting.

The Order also provides that despite any provisions in the letters patent, supplementary letters patent or by-laws of a corporation that provides otherwise, a meeting of directors or a committee of directors may be held by such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and a director participating in the meeting by those means is deemed to be present at the meeting.

Conclusion

With recent events regarding COVID-19 and government recommendations to avoid large public gatherings and comply with social distancing policies, many corporations may decide that it is best to either postpone their annual meetings or hold electronic meetings.

The foregoing information provides only an overview of the deadline extensions for annual meetings and potential holding of electronic meetings as of the date this information has been provided. Specific legal advice should be obtained. If you have questions in the above regard, please contact the Head of our Business Law Group, Robert P. Kinghan, at (613) 566-2848 or [email protected].