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Nov 15, 2021
Services: Business Law

OBCA and OBR Changes

2021 has seen some fairly significant changes to the Ontario Business Corporations Act (OBCA), which have recently come into effect. The province also implemented an entirely new Ontario Business Registry (OBR) in October 2021. Here are some of the most notable updates.

Changes to the Business Corporations Act

The new Ontario Business Corporations Act updates came into effect on July 5, 2021. The updates were passed in Bill 213, or the Better for People, Smarter for Business Act, 2020, which introduced a host of changes to various pieces of legislation.

As of July 5, nearly all of the changes have come into effect and the following are the most significant.

Changes to the process for removing directors

The first notable change is in s. 5(5)(a), which changes the procedure in the articles of incorporation on removing directors. The amended provision provides that the articles cannot require a greater number of shareholder votes to remove a director than the number specified in s. 122. S. 122 states that shareholders may remove directors by ordinary resolution, which are passed by a majority of votes cast. Taken together, this means that the articles can require no more than a simple majority (50% + 1) of shareholder votes to remove a director.

S.5(5)(b) is also on the topic of limiting the maximum number of votes that can be required to remove directors. It states that resolutions in writing by shareholders or their lawyers authorized to vote on their behalf cannot require more votes than are allowed in s. 104. Similar to above, this means that the articles cannot require more than a simple majority to remove directors.

Changes to resolutions made in writing

The second change is somewhat related to the update to s. 104. S. 104 governs resolutions in writing which are made in lieu of meetings, and a new s. 104(1)(c)(i) provides that, for non-offering corporations, a resolution in writing, that is signed by at least the majority of the shares held that are entitled to vote on the resolution, is valid as if it had been passed by ordinary resolution at a shareholders’ meeting. Furthermore, s. 104(c)(ii) states that these kinds of resolutions made in writing can pertain to all matters required by this Act to be dealt with at a shareholders’ meeting and will satisfy the Act’s requirements.

A notice requirement is also added in s. 104(3)-(4) for these resolutions in writing. For non-offering corporations, within 10 business days after a resolution in writing is signed by a majority of the shares entitled to vote on the resolution, the corporation will give notice of the resolution to shareholders who were entitled to vote on the resolution but did not sign it. This notice will include the text of the resolution and a statement that contains a description of and the reasons for the business dealt with by the resolution.

Lastly, another change to s. 104(5) made it so that if the articles or unanimous shareholder agreement require a greater number of shareholders to pass an ordinary resolution than is required by the Act, then that greater number prevails. For non-offering corporations, the number specified in the articles or the unanimous shareholder agreement is the minimum number of shareholders that are required to sign the resolution in writing referred to in s. 104(c). Resolutions in writing referred to in s. 104(c)(ii), i.e. any resolution in writing pertaining to business to be transacted at a shareholders’ meeting passable by an ordinary resolution, must be signed by at least the number of shareholders specified in the articles or unanimous shareholder agreement. However, this greater number of required shareholders to pass resolutions is not unlimited, it is subject to the restraint outlined in s. 104(c), which refers to a simple majority of shares held.

Removal of residency requirement

Finally, there is the removal of the residency requirement from s. 118. Under the old rule of s. 118(3), at least 25% of directors of a corporation, other than a non-resident corporation, needed to be resident Canadians, and where a corporation had fewer than four directors, at least one needed to be a resident Canadian. This rule has been removed altogether, meaning that corporations incorporated under the OBCA will no longer need to keep a resident Canadian on the board of directors.


Hands typing on a laptop

The OBCA was not the only business law related vehicle to receive updates. Ontario has also recently changed how it handles its corporate registry with the implementation of the online Ontario Business Registry.

The new Ontario Business Registry (OBR) launched on October 19, 2021. It is an online registry that is available 24/7/365. The creation of the new online registry is to facilitate access to government services for businesses. 

This online registry allows for the search of any business or not-for-profit corporation, access to the profile of one’s existing business or not-for-profit corporation, and the creation and dissolution of businesses or not-for-profit corporations.

Annual returns of Ontario corporations are also no longer being filed through the CRA, and will instead need to be filed through the OBR. These annual returns were exempt from May 15, 2021 to October 18, 2021 while the province set up the new registry. They are now required to be filed.

New businesses or not-for-profits that do not have a profile in the OBR will need to create a ONe-key ID and a ServiceOntario account. 

For businesses that need to access their profiles for the first time, a “company key” is required, which is similar to a personal identification number. This is given by the Ministry after a Company Key Request Form is completed and submitted. Once the key is obtained, follow the Login to ONe-Key button on the website and create a ONe-key ID and a ServiceOntario account.

For existing businesses that have a profile in the OBR, they simply need to go to their registry profile and find the service that they need.

The “All Services” page in the OBR contains information including forms for a wide range of documents that need to be filed for the various Ontario business law statutes, and notices on how to file each of them. Many of these forms have been updated, and the information related to these new changes should be noted.

If you have any questions or concerns about these changes, contact our team of lawyers.

Written by Yinan Li.

*This article does not constitute legal advice; always consult legal counsel.

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Yinan Li

The content of this article is intended to provide a general guide to the subject matter and is not legal advice. Specialist advice should be sought regarding your specific circumstance.