Vol. 137, No. 21 — October 8, 2003

Registration
SOR/2003-317 18 September, 2003

CANADA BUSINESS CORPORATIONS ACT

P.C. 2003-1377 18 September, 2003

Her Excellency the Governor General in Council, on the recommendation of the Minister of Industry, pursuant to subsection 261(1) (see footnote a)  of the Canada Business Corporations Act (see footnote b) , hereby makes the annexed Regulations Amending the Canada Business Corporations Regulations, 2001.

REGULATIONS AMENDING THE CANADA BUSINESS CORPORATIONS REGULATIONS, 2001

AMENDMENTS

1. Subsection 2(2) of the Canada Business Corporations Regulations, 2001 (see footnote 1)  is replaced by the following:

(2) A corporation that is subject to an exemption under provincial securities legislation, or to an order of the relevant provincial securities regulator that provides that the corporation is not a "reporting issuer" for the purposes of the applicable legislation, is not a "distributing corporation" for the purpose of the definition of that expression in subsection (1).

2. Subsection 5(1) of the Regulations is replaced by the following:

5. (1) The annual return referred to in section 263 of the Act shall be sent to the Director within six months after the end of the corporation's taxation year, and shall set out the required information as of the date of the taxation year end.

3. Paragraph 16(b) of the French version of the Regulations is replaced by the following:

b) l'édition ou la distribution de livres;

4. Subsection 24(2) of the Regulations is replaced by the following:

(2) Subsection (1) does not apply if a person requesting a corporate name establishes that it has, through use, acquired rights in the name and the name continues at the time of the request to have secondary meaning.

5. Section 34 of the Regulations is replaced by the following:

34. For the purpose of subsection 10(3) of the Act, a combined English and French form of the name of a corporation shall include only the expression "Inc.".

6. (1) The portion of section 45 of the Regulations before paragraph (a) is replaced by the following:

45. (1) For the purpose of subsection 141(3) of the Act, when a vote is to be taken at a meeting of shareholders, the voting may be carried out by means of a telephonic, electronic or other communication facility, if the facility

(2) Section 45 of the Regulations is amended by adding the following after subsection (1):

(2) For the purpose of subsection 141(4) of the Act, a person who is entitled to vote at a meeting of shareholders may vote by means of a telephonic, electronic or other communication facility, if the facility

(a) enables the vote to be gathered in a manner that permits its subsequent verification; and

(b) permits the tallied vote to be presented to the corporation without it being possible for the corporation to identify how the shareholder voted.

COMING INTO FORCE

7. These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Description

The Canada Business Corporations Regulations, 2001 are amended by the following:

•  repealing the use of the first expression "distributing corporation" in subsection 2(2). The reference to the expression "distributing corporation" should be deleted as the applicable legislation refers to orders of provincial securities regulators and they only use the term "reporting issuer", which is already part of subsection 2(2).

•  adding precision to subsection 5(1). The amendment specifies that the information set out in the annual return must be the information as of the taxation year end date. This requirement existed in the Canada Business Corporations Regulations prior to 2001. The deletion of the requirement in 2001 was not intended to change the policy. However, some members of the public have been confused with this omission. The amendment is intended to clarify the situation so that the information on the annual return connotes the information as of the taxation year end date.

•  adding to the French version of paragraph 16(b) the expression "de livres". This term is in the English version but is missing in the French version.

•  correcting minor drafting errors in subsection 24(2). The section should refer to "acquiring rights in the name" instead of "acquiring a name". This is a minor change as the expression "acquiring rights in the name" reflects the legal concept.

•  correcting minor drafting errors in section 34. This amendment is intended to clarify the use of the legal element required for a combined form of a name. This is a minor change as the legal element that is required for a combined form of a name should be a bilingual legal element. The only bilingual legal element that the Act allows to use is "Inc.". Section 34 should, therefore, only refer to the legal element "Inc." as it is the only bilingual legal element.

•  making the existing section 45, subsection 45(1) and adding a new subsection 45(2). The new subsection 45(2) will contain similar restrictions as subsection 45(1), but apply to subsection 141(4) of the Canada Business Corporations Act (CBCA). The restrictions in the existing section 45 apply when voting is carried out by means of a telephonic, electronic or other communications facility, namely the facility must enable the votes to be gathered in a manner that permits their subsequent verification and permits the tallied votes to be presented to the corporation without it being possible for the corporation to identify how each shareholder or group of shareholders voted. The omission of subsection 45(2) was a minor drafting error because subsections 141(3) and (4) of the CBCA were to have the same restrictions except that subsection 141(3) applies to all the shareholders voting electronically whereas subsection 141(4) applies only to one person voting electronically. The impact for shareholders and corporations resulting from this drafting error should be minimal. Stakeholders had the opportunity to comment on the restrictions in relation to subsection 141(3) during the legislative consultations before the regulations came into force. No opposition was received regarding this provision.

All of the amendments to the Canada Business Corporations Regulations, 2001 are of a technical nature. They do not reflect substantive changes to the regulations they modify but:

•  correct minor errors in format, syntax, spelling, punctuation;

•  make minor non-substantive clarifications.

Contact

Isabelle Breault
Corporations Canada
Department of Industry
Jean Edmonds Tower South, 9th Floor
365 Laurier Avenue West
Ottawa, Ontario
K1A 0C8
Telephone: (613) 941-5753
FAX: (613) 941-5781
E-mail: breault.isabelle@ic.gc.ca

Footnote a 

S.C. 2001, c. 14, s. 125

Footnote b 

S.C. 1994, c. 24, s. 1

Footnote 1 

SOR/2001-512

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