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Law Column

November 2009 Law Column

COMPANIES ACT

Important reforms

Richard Gendron, Attorney

Bill 63, when it comes into force, will bring about a profound reform of the Companies Act, which will become the Business Corporations Act (Loi sur les sociétés par actions).

The ultimate purpose of the legislation is to modernize the provisions of the Act and make the law more competitive with the Canada Business Corporations Act.

The new law introduces major innovations for directors, shareholders and SMEs. Among other things, the duties of directors will be clarified and certain responsibilities will be reduced or else abolished.

Shareholders, on the other hand, will gain numerous rights.

The new law also provides new remedies, including the right of inquiry, derivative action and remedy for abuse of privilege or inequity (“oppression remedy”).

The Business Corporations Act adds provisions on governance that are intended to clarify directors’ and shareholders’ respective roles and responsibilities.
 

Lastly, for SMEs, numerous provisions will help to simplify and improve conditions for new corporations.

Please note: The Business Corporations Act permits companies to carry on business in other jurisdictions (provincial or federal) and reciprocally.
 

With regard to transitional provisions, all companies subject to Part IA of the Companies Act will be automatically subject to the new law as soon as it comes into force.
 

These improvements are very positive and indeed have long been sought. If you wish to gain the greatest possible benefit from these new provisions, we invite you to contact our specialists in corporate law.