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This enactment amends the Canada Business Corporations Act. It is
the first major revision of the Act since it came into force in 1975.
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Among other things, the enactment amends the provisions
concerning liability of directors. It allows for a defence based on due
diligence and amends the indemnification provisions allowing for the
advancement of defence costs, and allowing indemnification in relation
to investigations. It also implements a new regime regarding the
apportionment of damage awards applicable to persons involved in the
preparation of financial information required under the Act or the
regulations, including directors and officers.
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The residency requirements for directors and the requirements
specifying the location of corporate records have been relaxed.
Residency requirements for committees of directors have been
eliminated.
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The enactment also includes measures to facilitate communications
among shareholders and between corporations and their shareholders.
To this end, it permits a greater utilization of electronic
communications, including holding meetings and voting by electronic
means. The enactment also relaxes the rules for proxy solicitation and
for certain aspects of the requirements for the submission of proposals
and sets conditions for the latter.
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The enactment also amends the provisions relating to the civil
remedies available in situations of insider trading and eliminates insider
reporting.
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A series of amendments are included that remove the requirements
relating to financial assistance and take-over bids. The enactment
expressly authorizes, under certain conditions, going-private and
squeeze-out transactions. It also addresses the rights, powers, duties and
liabilities of directors and shareholders under a unanimous shareholder
agreement and defences available to them.
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The enactment provides a number of limited exceptions to the
general rule prohibiting subsidiaries from acquiring shares of the parent
corporation.
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The enactment also includes technical amendments to the Act to
clarify certain provisions, to correct errors, to modernize it and to render
the language in the English version gender neutral.
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It also amends the Canada Cooperatives Act in order to generally
harmonize its provisions with the amendments mentioned above,
repeals the definition of ``associate'' in certain Acts and makes
consequential amendments to other Acts.
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