Part 4 Registered Office and Records (clauses 9-12)

This Part would be amended to provide that the articles of a corporation must specify the province, instead of the place, of the registered office together with consequential amendments to give effect to this change where appropriate (s. 19).

An amendment is proposed to permit corporate and accounting records to be kept at a place outside Canada as long as they are accessible electronically at the registered office or any other place in Canada designated by the directors. This amendment, would be subject to any restrictions imposed by the Income Tax Act, the Excise Tax Act, the Customs Act and all other legislation administered by National Revenue, which requires the maintenance of books and records in Canada (s. 20).

Amendments are also proposed to require an affidavit before access to the securities register of a distributing corporation is authorized and allow a reasonable fee to be charged for extracts (s. 21).

In addition, a number of technical changes are proposed to update and clarify the wording of the Part and to reconcile the English and French versions of the Act.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. :9
CBCA Section No. :19
Topic  : Registered Office and Records  (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
Subs. 19(1), (2) and (3) would be amended to provide that the registered office shall be in the province specified in the articles, that articles changing the province of the registered office shall be sent to the Director and that the directors are authorized to change the place and address of the registered office within the province specified in the articles.

Purpose of Change 
Currently, the "place" (city) where the registered office is to be situated must be set out in the articles. The directors can change the office (address/the building) within the city (place), but an amendment to the articles is required if the "place" is changed.

The proposed amendment would permit the directors to change the place and address of the registered office within the province specified in the articles. A consequential amendment would be also made to s. 6(1)(b).

Similar Provincial Laws 
N/A

Current Wording 
19. (1) A corporation shall at all times have a registered office in the place within Canada specified in its articles.

(2) A notice of registered office in prescribed form shall be sent to the Director together with any articles that designate or change the place of the registered office of the corporation.

(3) The directors of a corporation may change the address of the registered office within the place specified in the articles.

(4) A corporation shall send to the Director, within fifteen days of any change of address of its registered office, a notice in prescribed form and the Director shall file it.

Proposed Wording 

19. (1) A corporation shall at all times have a registered office in the province in Canada specified in its articles.

(2) A notice of registered office in the form that the Director fixes shall be sent to the Director together with any articles that designate or change the province where the registered office of the corporation is located.

(3) The directors of a corporation may change the place and address of the registered office within the province specified in the articles.

(4) A corporation shall send to the Director, within fifteen days of any change of address of its registered office, a notice in the form that the Director fixes and the Director shall file it.

Bill Clause No.:10
CBCA Section No.: 20(5) and new (5.1)
Topic  : Registered Office and Records   (Directors' Residency)

Sources of Proposed Law 
N/A

Changes From Present Law 

Permit corporate and accounting records referred in subs. 20(1) and (5) to be kept at a place outside Canada as long as they are accessible electronically at the registered office, or any other place in Canada designated by the directors, provided they do not undermine the provisions of the Income Tax Act, the Excise Tax Act, the Customs Act and all other legislation administered by National Revenue, which requires the maintenance of books and records in Canada. Require the corporation to provide reasonable assistance to examine such corporate records held in electronic form and that these records shall be available for inspection during regular office hours.

Subsection 20(5) has been amended so as to replace the words "other office in Canada" with "any other place in Canada designated by the directors."

Purpose of Change  
Computer information storage services are now international. The CBCA requires that certain corporate records and adequate accounting records be kept in Canada. Some Canadian corporations, however, want to take advantage of storage services offered outside Canada, particularly in the United States.

Revenue Canada has expressed concerns about allowing corporate records, particularly accounting records, to be kept outside Canada. The Income Tax Act requires that "records and books of accounts" shall be kept in Canada or such other place as may be designated by the Minister of National Revenue (s. 230(1)). The proposed provision would make it clear that the CBCA requirement is subject to the Income Tax Act and any other Act administered by the Minister of National Revenue. Also a requirement is imposed on the corporation to make its records available by means of a computer terminal or other technology and to provide technical assistance to facilitate their inspection.

Similar Provincial Laws  
Business Corporations Act (Ontario)

Current Wording  
20. (5) Where accounting records of a corporation are kept at a place outside Canada, there shall be kept at the registered office or other office in Canada accounting records adequate to enable the directors to ascertain the financial position of the corporation with reasonable accuracy on a quarterly basis.

Proposed Wording  
20. (5) If accounting records of a corporation are kept outside Canada, accounting records adequate to enable the directors to ascertain the financial position of the corporation with reasonable accuracy on a quarterly basis shall be kept at the registered office or any other place in Canada designated by the directors.

(5.1) Despite subsections (1) and (5), but subject to the Income Tax Act, the Excise Tax Act, the Customs Act and any other Act administered by the Minister of National Revenue, a corporation may keep all or any of its corporate records and accounting records referred to in subsection (1) or (2) at a place outside Canada, if

(a) the records are available for inspection, by means of a computer terminal or other technology, during regular office hours at the registered office or any other place in Canada designated by the directors; and

(b) the corporation provides the technical assistance to facilitate an inspection referred to in paragraph (a).

Bill Clause No. :  11
CBCA Section No. : 21(1), new (1.1), (3) (7)(8) and (9)
Topic  :Registered Office and Records(Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law  
Add a new subsection 21(1.1) to require an affidavit under s. 21(1) before access to the securities register of a distributing corporation is authorized and allow a reasonable fee to be charged for extracts.

Amend s. 21(3)(7)(8) and (9) to reflect these changes.

Purpose of Change 
(A) Subs. 21(1) grants shareholders (and others) the right to obtain access to the records referred to in s. 20(1). These records include the securities register. Section 50 specifies that the securities register shall show, with respect to each class of securities, the names, alphabetically arranged, and addresses of each person who is or has been a security holder, the number of securities and the particulars of the issue and transfer of securities. Pursuant to s. 21(1), a shareholder or creditor may examine and take extracts from these records free of charge. In the case of a distributing corporation, any other person may do so on payment of a reasonable fee.

(B) Subsection 21(3) authorizes shareholders (and others) to request and receive from the corporation a list of shareholders, their addresses and the number of shares owned. Before the corporation is required to prepare and deliver a list of shareholders, the applicant must send to the corporation a fee and an affidavit stating that the list of shareholders will not be used other than for the purposes specified.

It appears inconsistent to require an affidavit in order to obtain a shareholders list under s. 21(3), but not to obtain access to the securities register under s. 21(1). This is particularly so given that more information is available from the securities register (e.g., all securities, not just shares, and past owners as well as present, and particulars of securities transfers including dates and the consideration). The amendments are designed to address this inconsistency.

The modifications to s. 21(3)(7)(8) and (9) are consequential amendments.

Similar Provincial Laws  
N/A

Current Wording  
21. (1) Shareholders and creditors of a corporation, their agents and legal representatives and the Director may examine the records described in subsection 20(1) during the usual business hours of the corporation, and may take extracts therefrom, free of charge, and, where the corporation is a distributing corporation as defined in subsection 126(1), any other person may do so on payment of a reasonable fee.

(3) Shareholders and creditors of a corporation, their agents and legal representatives, the Director and, where the corporation is a distributing corporation as defined in subsection 126(1), any other person, on payment of a reasonable fee and on sending to a corporation or its agent the affidavit referred to in subsection (7), may on application require the corporation or its agent to furnish within ten days from the receipt of the affidavit a list (in this section referred to as the "basic list") made up to a date not more than ten days before the date of receipt of the affidavit setting out the names of the shareholders of the corporation, the number of shares owned by each shareholder and the address of each shareholder as shown on the records of the corporation.

(7) The affidavit required under subsection (3) shall state

(a) the name and address of the applicant;

(b) the name and address for service of the body corporate if the applicant is a body corporate; and

(c) that the basic list and any supplemental lists obtained pursuant to subsection (4) will not be used except as permitted under subsection (9).

(8) La personne morale requérante fait établir la déclaration sous serment par un de ses administrateurs ou dirigeants.

(9) A list of shareholders obtained under this section shall not be used by any person except in connection with

(a) an effort to influence the voting of shareholders of the corporation;

(b) an offer to acquire shares of the corporation; or

(c) any other matter relating to the affairs of the corporation

Proposed Wording  
21. (1) Subject to subsection (1.1), shareholders and creditors of a corporation, their personal representatives and the Director may examine the records described in subsection 20(1) during the usual business hours of the corporation, and may take extracts from the records, free of charge, and, if the corporation is a distributing corporation, any other person may do so on payment of a reasonable fee.

(1.1) Any person described in subsection (1) who wishes to examine the securities register of a distributing corporation must first make a request to the corporation or its agent, accompanied by an affidavit referred to in subsection (7). On receipt of the affidavit, the corporation or its agent shall allow the applicant access to the securities register during the corporation's usual business hours, and, on payment of a reasonable fee, provide the applicant with an extract from the securities register.

(3) Shareholders and creditors of a corporation, their personal representatives, the Director and, if the corporation is a distributing corporation, any other person, on payment of a reasonable fee and on sending to a corporation or its agent the affidavit referred to in subsection (7), may on application require the corporation or its agent to furnish within ten days after the receipt of the affidavit a list (in this section referred to as the "basic list") made up to a date not more than ten days before the date of receipt of the affidavit setting out the names of the shareholders of the corporation, the number of shares owned by each shareholder and the address of each shareholder as shown on the records of the corporation.

(7) The affidavit required under subsection (1.1) or (3) shall state

(a) the name and address of the applicant;

(b) the name and address for service of the body corporate, if the applicant is a body corporate; and

(c) that the basic list and any supplemental lists obtained pursuant to subsection (4) or the information contained in the securities register obtained pursuant to subsection (1.1), as the case may be, will not be used except as permitted under subsection (9).

(8) La personne morale requérante fait établir l'affidavit par un de ses administrateurs ou dirigeants.

(9) A list of shareholders or information from a securities register obtained under this section shall not be used by any person except in connection with

(a) an effort to influence the voting of shareholders of the corporation;

(b) an offer to acquire securities of the corporation; or

(c) any other matter relating to the affairs of the corporation.

Bill Clause No. :12
CBCA Section No. :23
Topic   :Registered Office and Records(Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law 
Replace the current section 23 with a new one that provides that a corporation may, but need not, have a corporate seal and that unsealed documents are not invalid merely because a corporate seal is not affixed.

Purpose of Change  
This change will clarify that corporate law does not require corporations to have or use seals. This change will overcome the problem that, at common law an unsealed document document is invalid

Similar Provincial Laws  
Business Corporations Act (Alberta), Companies Act (Québec)

Current Wording  
23. An instrument or agreement executed on behalf of a corporation by a director, an officer or an agent of the corporation is not invalid merely because a corporate seal is not affixed thereto.

Proposed Wording  
23. (1) A corporation may, but need not, adopt a corporate seal, and may change a corporate seal that is adopted.

(2) A document executed on behalf of a corporation is not invalid merely because a corporate seal is not affixed to it.