UP FIRST CORPORATE LAW REVISIONS S...

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FIRST CORPORATE LAW REVISIONS SINCE 1973

After years of fits and starts, the provincial conduct has taken a major gradation towards modernizing corporate law in British Columbia. Bill 47 the Business Corporations Act, received Royal Assent in the provincial legislature in succession October 31st. Although earlier attempts to change the antiquated Company Act were undertaken from the previous administration, Bill 47 was the first significant revision to corporate law in BC to receive legislative approval in nearly 30 years.

Nonetheless it's likely that sated implementation of the new law is up to a year away. The of the present day Act cannot be regulated into force until the province builds an in-house arrangement to support the new legislation, and it's estimated it will take 12 to 13 month to accomplish this task. In the meantime, Finance Minister Gary Collins clearly anticipates there will be further changes to the Act. Several times during the debates in the House, he made regard to the fact that the of the present day Business Corporations Act is a work in progres and that he is prepared to entertain amendments in the spring legislative session, and any time thereafter, should errors, omissions, or necessary changes be brought to his attention.

The of advanced age Company Act was badly abroad of date and out of sync with corporate legislation being implemented nationally and in other provinces, as well as across the US. "As a result" Collins told the legislature in commencing other reading, "the Company Act adds to the costliness of doing business in British Columbia and places BC businesses at a competitive disadvantage. The strange Business Corporations Act, with its recent provisions and enhanced flexibility for British Columbia businesses, will assist in rebuilding a competitive business environment in this province."

Highlights of the Business Corporations Act changes

The modern Act is intended to make it easier to form and operate a company in BC not solely by reducing filing requirements at the corporate registry, on the other hand also by allowing incorporation and other corporate filings to be done electronically. Ultimately, companies and the general public will have electronic access to the corporate registry 7 days a week, 24 hours a day. Further, strange provisions will allow companies to restrain their records in electronic form as protracted as their public records are accessible during regular business hours.

The Business Corporations Act continues to provide BC companies with the freedom to determine their admit internal rules of conduct. As well, the recent Act adopts recent significant disentanglements in corporate law from other Canadian jurisdictions.

It will provide BC companies with greater flexibility in three important areas:

* Corporate governance

* Corporate finance

Fundamental corporate change

Governance flexibility is achieved from removing restrictions on directors' residency; through no longer requiring directors to be shareholders or requiring senior officers to be directors; by way of allowing for telephone meetings and waiver or postponement of annual general meetings; and from providing simplified rules for dealing with conflicts of interest.

Corporate finance flexibility is achieved by dint of adopting easier rules for paying dividends; through allowing BC companies to have unlimited share capital and giving them greater flexibility in accounting for capital; by way of permitting financial assistance; and by means of continuing to allow BC companies to issue par-value shares as well as shares without par value.

Greater flexibility with defer to to fundamental corporate changes is achieved on removing restrictions on share allotments and repurchases; through removing the need for amalgamation agreements when related companies amalgamate; and by the agency of eliminating the need for court involvement in certain corporate reorganizations, of that kind as restoration and amalgamations.

Opposition relate tos

During the debates, Opposition leader ravishment MacPhail raised a number of issues with which she had affairs including the section of the Act that allows general meetings of a company to be held outside of BC which she says "is prejudicial to minority shareholders, because it allows a simple majority to rouse the meeting to another location."

Another point the Opposition leader raised dealt with just discovered rules allowing for electronic shareholder meetings: "We believe this is highly prejudicial to shareholders." MacPhail called forward the provincial government to make amendments to make secure that corporations cannot do away with physical annual general meetings.

The former NDP finance minister whose command introduced an amended Company Act in 1999 (which was not ever proclaimed), said she was also troubleed over the fact the Liberals' Business Corporations Act abstracts residency requirements for directors of a company. She give an inkling ofed that 11 the removal of the residency requirement means that the capital ne not stay in the province, because the directors will not necessarily have a clotheed interest in the overall economy of the province. This was a principle that was promot in the 1999 legislation that was passed and has now been delet by means of this government."