What Amendments to the Alberta Business Corporations Act Mean For Your Business

What Amendments to the Alberta Business Corporations Act Mean For Your Business
Written by: Devon Slavin 

Alberta’s Business Corporations Act (ABCA) has been amended - and the amendments will impact companies of all sizes in Alberta. In a provincial release, the Government of Alberta stated that the aim of the reform is to attract investment and “ensure that Alberta is the first choice for business”.[1] Key changes include the removal of the residency requirement for directors, and provisions that create an agent for service requirement and allow for virtual annual general meetings (AGMs).
 
Residency Requirements for Directors
Previously, the ABCA required at least 25% of an Alberta Corporation’s directors to be resident Canadians.[2] This requirement also applied to quorum at meetings, requiring 25% of those present to be Canadian residents.[3] In summer 2021, the residency requirement was removed, meaning that ABCA corporations no longer need to have resident Canadians on their boards. The stated goal of the amendment is to promote economic growth and job creation by eliminating unnecessary burdens.[4] This will impact companies by being a welcome change for foreign investors. Before a company alters the composition of the board, it is important to review the company’s by-laws to determine if the by-laws contain residency requirements. If a company wishes to take advantage of the new flexibility in the ABCA, it may be necessary to amend the by-laws.
 
Agent for Service Requirement
According to the change in residency requirement, an ABCA corporation may no longer have any directors located in Canada. Therefore, all ABCA corporations are now required to appoint an Agent for Service.[5] The Agent for Service must be a resident Albertan and have an office that is accessible to the public during normal business hours[6]. Existing ABCA corporations have until March 29, 2022, to appoint this agent for service. This is important for ABCA corporations to be aware of, because if the company does not appoint and register the Agent for Service within the time frame, the Registrar of Corporations can dissolve the corporation.
 
Virtual Shareholder Meetings
Previously, under the ABCA, meetings could only be held by electronic means if the bylaws expressly permitted it. With the new amendment, Alberta organizations can now automatically hold board, shareholder and member meetings by “electronic means”. The ability to hold virtual shareholder meetings is now restricted only by the bylaws of the company.[7] In this context, “electronic means” requires that the meeting take place in real-time, meaning that all attendees can communicate instantaneously.[8]
 
Devon Slavin is a member of the BLG Business Venture Clinic and is a 2rd year student at the University of Calgary Faculty of Law

Footnotes:
[1] “Ensuring Alberta is the First Choice for Business” (15 November 2021), online: Government of Alberta https://www.alberta.ca/release.cfm?xID=80375781B96F2-E5F6-7FFC-34F563DC2D7A540D.
[2] Business Corporations Act, RSA 2000, c B-9, s 105(3) [ABCA], as amended by Red Tape Reduction Implementation Act, 2020. 
[3] Bryan Haynes and Adrienne Roy, ”Important Changes to the Alberta Business Corporations Act Now in Effect” (13 April, 2021), online (blog): Bennett Jones Blog https://www.bennettjones.com/Blogs-Section/Important-Changes-to-the-Alberta-Business-Corporations-Act-Now-in-Effect.
[4] Ibid.
[5] ABCA s 20.1.
[6] Ibid.
[7] Katherine Prusinkiewicz. “Amendments to the Alberta Business Corporations Act Have Come Into Force” (30 March 2021), online (blog): Norton Rose Fulbright Thought Leadership https://www.nortonrosefulbright.com/en/knowledge/publications/36bbb4d5/amendments-to-the-alberta-business-corporations-act-have-come-into-force.
[8] ABCA s 1(p.1).