Annual meetings of federal corporations during the COVID-19 outbreak
By law, federally incorporated businesses and not-for-profit corporations have to hold an annual general meeting (AGM) of shareholders or members every year. This is so that shareholders and members can make governance decisions based on current information, and have confidence to continue to support the business or not-for-profit.
Under normal circumstances, federally incorporated businesses and not-for-profits have to call an AGM within 15 months of the previous annual general meeting and no more than six months after the organization's last financial year-end.
As hosting in-person AGMs during the COVID-19 outbreak would contradict public health advice, we have outlined options for federal corporations to consider in order to remain compliant under the Canada Business Corporations Act and the Canada Not-for-profit Corporations Act.
Hold a virtual meeting
Some corporations have the right to hold meetings virtually using digital technologies. To see if this is a valid option, check the corporation's by-laws to make sure there are no restrictions on participation in meetings by digital means.
Depending on the by-laws, a corporation could have two options:
- Virtual meeting: Participants attend exclusively through a digital channel that allows participants to communicate with each other during the meeting. The corporation's by-laws must specifically allow virtual meetings.
- Partially virtual meeting: Some participants attend in-person and others participate through a digital channel that allows participants to communicate with each other during the meeting. A partially virtual meeting may be a viable alternative if the by-laws do not permit virtual meetings.
Under both options, participants can vote digitally as long as:
- it is not prohibited by the corporation's by-laws
- it complies with regulations, meaning that the corporation gathers votes in a way that allows them to be verified, tallied and presented while maintaining votes anonymous.
If the corporation's by-laws prohibit virtual meetings or are silent on holding them, the board of directors may change the by-laws with the change effective until the next meeting of shareholders or members (when the change can be confirmed or rejected).
Sign a resolution in lieu of a meeting
A practical option for corporations with a small number of shareholders or members is a written resolution instead of an AGM. The resolution must include the business items normally communicated at the AGM. At minimum, this includes:
- electing directors
- considering the corporation's financial statements
- appointing the corporation's auditor or public accountant, or deciding to waive the appointment of an auditor or public accountant.
All shareholders or members who are entitled to vote at the corporation's AGM must sign the written resolution. Once signed, keep the resolution in your corporation's records.
Delay calling the meeting
Not-for-profit corporations can apply to delay calling their AGM when it is detrimental to call the meeting within the normal timeframe. Apply using the online form below at least 30 business days before your not-for-profit would send the notice calling its AGM under normal circumstances.
Federal business corporations need court approval to delay an AGM. If you have any questions, please contact us.
Canada Business Corporations Act, paragraphs 132(4) and 133(3)
Canada Not-for-profit Corporations Act, paragraph 160(2)
Extending the time for calling an annual meeting of members (Not-for-profit corporations)
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