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It's AGM Season! Holding an Annual Meeting During the COVID-19 Crisis

Business Law

Author: Jennifer MacGregor-Greer

For thousands of BC companies, annual general meeting (AGM) season is coming up.  Normally an AGM means all the shareholders of a company gather to elect directors, accept annual financial statements and hear about the company’s recent challenges, successes and plans for the upcoming year.  But this year, everything looks a little different.  Given current social distancing requirements, for many BC companies it is unlikely that AGMs can be held in the usual manner.

A further challenge stems from the fact that in BC (unlike in many other jurisdictions in Canada and elsewhere), while shareholders may participate in meetings by telephone or another communications medium, under the Business Corporations Act (British Columbia) a meeting is required to have a physical location, so that shareholders can attend the meeting in person if desired.  Again, under the current COVID-19 crisis, this is not a desirable option.

The BC government has recently addressed these challenges in two ways: first, by making it possible for a BC company to request an extension of up to six months to its AGM deadline; and second, by making it possible for companies to hold wholly virtual meetings pursuant to Ministerial Order No. M116 made under the Emergency Program Act on April 21, 2020.

Extending your AGM Deadline

Normally, a BC company must hold its AGM within 15 months after its last AGM date, and once per calendar year.  The BC Registrar of Companies has advised that this year, it will grant an extension of up to six months for BC companies wishing to delay their AGMs.  Requesting an extension is a simple process, but you must inform your shareholders that the AGM has been delayed.

Virtual Meetings

If you wish to continue to hold your AGM on your normal schedule, pursuant to the recent Ministerial Order you can hold your meeting as a wholly virtual meeting, without setting a physical location, as long as:

The requirement that all participants be able to communicate fully at the meeting can be a challenge if you are not used to holding virtual meetings.  The ability to communicate, in this context, includes the ability to ask questions at the meeting, the ability to engage in dialogue with other meeting participants, and the ability to vote, including by way of ballot if a poll is called for.  All of these items require some thought when planning the meeting and may require the use of specialized meeting software, or multiple modes of delivery.

For Federal Corporations

If your company was incorporated under the Canada Business Corporations Act (CBCA) rather than under the Business Corporations Act (BC), different rules will apply.  Industry Canada has specifically confirmed that virtual-only shareholder meetings are permitted under the CBCA, if they are not prohibited under the corporation’s by-laws, as long as shareholders can communicate with one another through the digital platform.  However, unlike for BC companies, any delay in a federal corporation’s AGM is only possible with court approval.

Conclusion

If your AGM date is coming up and you would like to either delay your AGM until later this year, or hold a fully virtual meeting, please contact Marshall Pawar, Jesse Ahuja, Jennifer MacGregor-Greer or Rosalyn Chan. We’d be pleased to help you determine the solution that is most appropriate for your needs.

This update is intended as a summary only and should not be regarded or relied upon as advice to any specific client or regarding any specific situation.

MICHAEL, EVRENSEL & PAWAR LLP