Do federal corporations have to hold an AGM during the COVID-19 outbreak?

Business Law

The Canada Business Corporations Act and the Canada Not-for-profit Corporations Act (collectively, the “Acts”) require federally incorporated corporations and not-for-profit corporations to hold an annual general meeting (an “AGM”) every year. All federally incorporated corporations and not-for-profit corporations must call an AGM within 15 months of the previous AGM and no more than six months after the organization’s last financial year-end.

Corporations Canada has released a notice that hosting an in-person AGM during the COVID-19 outbreak would be contrary to public health advice to practice physical distancing and self-isolation. As a result, federally incorporated businesses and not-for-profit corporations have some options to remain compliant under the Acts.

1. Hold A Virtual Meeting

So long as there are no restrictions in the corporation’s by-laws, your corporation may have the right to hold meetings virtually using digital technologies. A corporation could either (a) hold a virtual meeting where all participants attend through a digital channel that allows participants to speak to one another; or (b) host a meeting where some participants attend in-person while others participate through a digital channel that allows participants to speak to one another.

Under both options, the participants can vote digitally so long as (a) it is not prohibited by the corporation’s by-laws; and (b) the corporation gathers the votes in a manner which allows them to be verified, tallied and presented while keeping the votes anonymous.

The corporation’s by-laws should be reviewed carefully to ensure that virtual meetings are acceptable and to determine which of the two options above is applicable. If the corporation’s by-laws are silent with respect to holding virtual meetings, the board of directors could change the by-laws with the change effective until the next meeting of shareholders or members.

2. Delay calling the AGM

Not-for-profit corporations can apply to delay the calling of their AGM when it would be detrimental to call the meeting within the normal timeframe. An application must be made by email to: [email protected] at least 30 business days before sending the notice calling the meeting.

Federally incorporated corporations require court approval to delay an AGM.

Contact the responsible lawyer of your federal corporation or not-for-profit entity at Lindsay Kenney LLP

Business Law
Lindsay Kenney LLP – Langley Office