Upon the receipt of Royal Assent to Bill C-20, the Time Limits and Other Periods Act (COVID-19), became law (the Act). Under the Act, certain deadlines set out in various federal statutes can be extended. This includes the Canada Business Corporations Act (CBCA), among others, under which many businesses are incorporated and governed.
On August 5, 2020, the Minister of Industry, Science and Economic Development issued an order extending deadlines that affect corporations incorporated under the CBCA (the Order).
The CBCA contains several deadlines which each corporation governed by the statute must comply. These deadlines dictate the timing of when annual general meetings of shareholders must be called, when financial statements must be prepared and presented at each meeting, and when financial statements must be sent to shareholders, if required.
The Minister’s power to extend deadlines is retroactive to March 13, 2020 but is limited in that deadlines may not be extended more than 6 months and in all cases not past December 31, 2020.
First Meetings and AGMs
Under s.133 of the CBCA, a corporation must call its first annual meeting within 18 months of incorporation. Any other annual meeting must occur within 15 months from the previous meeting and within 6 months of the corporation’s financial year end. Pursuant to the Order, corporations incorporated on or after September 13, 2018 have until the earlier of 24 months from incorporation or December 31, 2020 to call their first meeting. If a corporation’s previous meeting was held on or after December 31, 2018 or its financial year ended on or after September 13, 2019, the corporation must call its AGM on the earlier of 21 months from its previous AGM and December 31, 2020.
Auditor Reports and Financial Statements
The Order also extends timing for the currency of financial statements presented to shareholders at the AGM. Under the Order, the financial statements and auditor’s report, if any, presented to the shareholders at the 2020 meeting, must be current to at least 12 months, rather than 6 months.
Extensions under other governing statutes
Corporations incorporated and governed by federal statutes similar to the CBCA, such as the Canada Not-for-profit Corporations Act S.C. 2009, c. 23 and Canada Cooperatives Act, R.S.C. 1998, c. 1 are also affected by the Order and extensions to deadlines for meetings have mirrored those that affect the CBCA.
The Ontario government issued an order effective March 17, 2020 that temporarily extends the deadlines for Ontario governed business and not-for-profit corporations to hold their annual meetings and allow for electronic meetings. Find more information on those extensions here.
While the Act also provides the Minister power to suspend or extend certain time periods set out in the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (BIA) and the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (CCAA) as of the date of this article the Federal Government has not indicated any intention of doing so.
Conor Cronin is an associate lawyer in the Business Law Group at Perley-Robertson, Hill & McDougall LLP. Much of Conor’s work focuses on helping young entrepreneurs and start-ups get organized, navigate the early stages of their development and deal with shareholder disputes. Conor has acquired a vast amount of corporate legal knowledge through his work in purchase and sale transactions, involving privately and publicly owned companies, preparing shareholder agreements and employee stock option plans.
