The Government of Ontario’s Ministry of Government and Consumer Services (MGCS) has completed its review of key elements of Ontario business law and is now requesting input from stakeholders. The proposed changes include amendments to the Business Corporations Act (OBCA) and amendments to the Arthur Wishart Act (Franchise Disclosure), 2000 (AWA).
Proposed amendments to the OBCA include:
- Removal of the current requirement under the OBCA that at generally, at least 25% of a business corporations’ directors be Canadian residents;
- Amending the OBCA to lower the approval threshold for a written shareholder resolution instead of a meeting for privately-held corporations. This is proposed to be done by lowering written shareholder approval to a majority of the voting shares – or special majority for certain decisions – instead of the current requirement for a unanimous written resolution; and,
- Amending the OBCA to allow corporations to relieve or limit the liability of fiduciaries (e.g. directors and officers) arising from the corporate opportunity doctrine by allowing fiduciaries to pursue certain business opportunities without fear of liability arising from their duties in certain circumstances.
The MGCS is also proposing to amend the AWA by clarifying what it sees as existing ambiguities in law by bringing into force related amendments to the regulations under the AWA. Proposed amendments could include:
- The manner of determining “Total Initial Investment” for minimum and large investment thresholds;
- Any changes to the minimum and large investment threshold amounts for exemptions from disclosure;
- The amount of the franchise deposit paid under a fully refundable deposit agreement that does not bind a prospective franchisee to enter into a franchise agreement would be exempt from disclosure;
- The information that must be contained in a Statement of Material Change; and,
- The accounting standards for financial statements that must be included in the Disclosure Document.
MGCS is also proposing additional amendments to the Personal Property Security Act, which are not covered here.
The deadline for comments is November 26, 2019.
The Ontario Ministry of Ministry of Government and Consumer Services has posted a detailed backgrounder on the proposed amendments on its website.
For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004.
This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.