1.                  PRE-EXISTING COMPANY PROVISIONS:

Voting Thresholds

(a)                The majority of votes required to pass a special resolution, by all shareholders or any class of shareholders, is three-quarters, unless the Memorandum or Articles of the company specify a different majority required to pass a separate resolution for a particular class or series of shares.

Shares of Pre-existing Company to be Purchased Rateably

(b)               Before the company purchases any of its shares, it must offer to purchase them rateably from every shareholder holding shares of the class or series of shares to be purchased, unless:

(i)                  the purchase is made through a securities exchange;

(ii)                the shares are being purchased from an employee, former employee or affiliate of the company;

(iii)               a special separate resolution relieving the company from its obligation to comply with this requirement is passed by the shareholders of the class or series of shares being purchased ;

(iv)              there is reason to believe that the purchase price of the shares is not more than the fair market value of those shares;

(v)                the purchase is made under the Court procedures set out in the dissent procedures under the Act;  or

(vi)              the purchase is of fractional shares.

(c)                A shareholder may, in writing, waive the right to receive an offer to purchase shares being repurchased by the company before the offer expires, either before or after the purchase by the company.

Issue Price for Shares

(d)               The price of shares without par value must be set by a special resolution unless the Articles of the company authorize the directors of the company to determine the price or consideration.

Restrictions on Power to Allot and Issue Shares

(e)                Unless the company was, immediately before the coming into force of the Act, a reporting company within the meaning of the Old Act, or a public company, the directors must, before allotting shares, offer the shares to be allotted to each shareholder holding shares of the class to be allotted in the proportion that the number of shares held by that shareholder bears to the total number of shares of that class.

(f)                 If there is more than one class of shares, any shares remaining after the expiration of the offer made to the shareholders holding shares of the same class must be offered to shareholders holding shares of any other class on substantially the same terms and at a price per share not less than the price per share offered to shareholders holding shares of the same class.

(g)                This section does not apply to:

(vii)             an allotment of shares for consideration other than money;

(viii)           an allotment of shares under rights of conversion or exchange, an amalgamation, an arrangement, a stock dividend, a registered employee share ownership plan or a registered employee venture capital plan.

(h)                The offer under this section must be made by notice that includes the time period within which the offer must be accepted, and must be at least 7 days after receipt of the offer unless the company authorizes the inspection.

(i)                  For a period of three months after the offer expires or has been declined, the directors may offer the shares to the persons and in the manner the directors may decide, as long as there are no other existing shareholders who are entitled to receive an offer and the price per share in the offer is not less than the price per share in the offer made to the existing shareholders.

(j)                 A shareholder may not waive generally the right to be offered shares under this section.

(k)               Shareholders may waive, in writing, the right to be offered a specific allotment of shares, which waiver is effective whether given before or after the allotment of the shares.

Shares of Pre-existing Company to be Redeemed Rateably

(l)                  If the company proposes to redeem some but not all of the shares of a particular class or series of shares, it must ensure that the redemption is made rateably among every shareholder who holds shares of the class or series of shares to be redeemed, however;

(m)              The above requirement is inapplicable if the Memorandum or Articles provide that the company may redeem some but not all of the shares of a class without doing so rateably.

2.                  INCORPORATION:

(a)                There will no longer be a Memorandum.  New companies will adopt an Incorporation Agreement instead of a Memorandum and the information formerly contained in the Memorandum will be set out in the Notice of Articles. 

(b)               An unlimited number of authorized shares is now allowed.

(c)                Par value shares are retained.

(d)               Articles are no longer filed with the Registrar of Companies – they will be kept in the Records Book at the Records Office.

(e)                Pre-Incorporation contracts are now allowed.

(f)                 Incorporators may be corporations.

(g)                Incorporators are not deemed first directors of a Company.

3.                  DIRECTORS AND OFFICERS:

(a)                There are no residency requirements for directors (the majority of directors are no longer required to be ordinarily resident in Canada and at least one director be ordinarily resident in British Columbia).

(b)               A company is not required to have officers unless specified in its Articles – there is no need for a president and a secretary.  The President is no longer required to be a director.

(c)                Residential addresses are not required for directors (the address shown may be a business address).

(d)               Consents to Act can be signed after a director’s appointment, and resignations can be received other than at the registered office.

(e)                In some circumstances, a person who is incorrectly shown on a public record as a director or officer may apply to court to have the record corrected.

(f)                 Conflicts of interest provisions are altered and strengthened and now apply to senior officers.

(g)                There is a two pronged materiality test for disclosable interests (the transaction must be directly or indirectly material to the director or officer and the transaction must be material to the company).

(h)                There are no time constraints on when the disclosure must be made.  As long as a special resolution is passed approving the interest disclosed, the director or senior officer will not have to account for profits and the court will not set aside the transaction.

(i)                  The signature of the director disclosing the interest may be omitted from a consent resolution approving the contract or transaction and the resolution will be effective if it is signed by the balance of directors.

(j)                 There are a number of exceptions to the disclosure requirements, including contracts with wholly owned subsidiaries, the remuneration of directors and officers and certain contracts that are for the benefit of the company.

(k)               With respect to their liability, directors are provided with the defence of reliance on professional reports (such as accountants, lawyers, or other professionals).

(l)                  There is no need for court approval before obtaining directors’ and officers’ indemnities (with some exceptions).

(m)              The Articles may provide for the transfer of powers to manage the company from the directors to the shareholders (similar to a Unanimous Shareholders Agreement).

4.                  FINANCE:

(a)                There are no restrictions on a company giving financial assistance, nor will there be a solvency requirement.

(b)               A company is required to disclose any financial assistance that is material to the company and that the company gives to the company’s shareholders, directors, officers or employees (or their associates), or to any person for the purpose of a purchase of shares in the company.  The disclosure requirements are extended to include affiliated companies.

(c)                The definition of “insolvent” is narrowed to only apply to a company’s inability to pay its debts as they become due in the ordinary course of its business.

(d)               Privately held companies can waive annual financial statements.

(e)                Copies of the current unaudited financial statements of the company are now required to be kept in the Records Book. 

(f)                 There is no longer a requirement to keep documents approved by the directors in the Records Book.

(g)                The right of shareholders of private companies to waive the appointment of an auditor by unanimous resolution extends to subsidiaries whose parent company has not waived the appointment of an auditor.

(h)                The par value of shares that have a par value may be stated in any currency.

(i)                  It will be possible to reduce the capital of the company by a special resolution, rather than a court order, unless the capital is reduced to an amount that is equal to or less than the realizable value of the company’s assets less its liabilities.

5.                  SHARE TRANSACTIONS:

(a)                Except for pre-existing companies, pre-emptive rights or right of first refusal on share allotments are not required under the Business Corporations Act.  Pre-existing companies may remove the Pre-existing Company Provisions and thus remove the pre-emptive rights.

(b)               If the Pre-existing Company Provisions containing the pre-emptive right on share allotment apply to the Company, there are a number of exceptions, for example: where the consideration for the shares being issued is all or substantially all non-cash, for reporting companies and for stock dividends.

(c)                Except for pre-existing companies to which the Pre-existing Company Provisions apply, there is no pro-rata right to receive an offer to purchase on repurchase or redemption of shares by the company.

(d)               There are a number of exceptions to the pro-rata right on repurchases, including by a special separate resolution of the relevant class or series of shares, or where the purchase price of the shares is not more than their fair market value.

(e)                Shares without par value may be allotted for an amount less than the consideration received for them in certain circumstances.

(f)                 The New Act specifies that dividends may be paid out of profits, capital or otherwise, except when the company is insolvent or would be rendered insolvent by such payment (there is no restriction on stock dividends).

(g)                A subsidiary may purchase shares of its parent, unless it is insolvent or the purchase would render it insolvent.

(h)                The insider trading provisions have been expanded and will be limited to private companies.  The provisions of the Securities Act and regulations apply to public companies.

6.                  SHAREHOLDERS’ MEETINGS:

(a)                Annual general meeting time limits have been brought into line with the Canada Business Corporations Act (18 months for first annual general meeting, 15 months thereafter, but there must still be one in each calendar year). 

(b)               Electronic and telephone meetings of shareholders and directors are made easier.

(c)                It is easier to hold shareholders’ meetings outside British Columbia.

(d)               Annual General Meetings may be postponed or waived by unanimous resolution.

(e)                The notice period for general meetings will be prescribed by regulation and may be shortened in Articles.

(f)                 Notice of shareholders meetings must be given to all directors of the company.

(g)                Unless the Pre-existing Company Provisions apply to the company, a special resolution may be passed by a “Special Majority” which can be defined in the Articles as at least a 2/3 majority and no more than a 3/4 majority.

(h)                A “special separate resolution” may be passed by a particular class or series and will have similar majority requirements to a Special Majority.

(i)                  “Exceptional Resolutions” may be defined in Articles to require a specified majority of votes greater than a “Special Majority”.

7.                  REGISTERED AND RECORDS OFFICE:

(a)                It is easier to transfer the Registered and Records Offices to the residence of a director or an officer.

(b)               Both a delivery address and a mailing address (which may be different) are now required for both the registered and records offices.

(c)                The Act requires that the date and time must be noted on all documents received for deposit at the company’s Records Office if the document is one that is required to be kept at the Records Office.

(d)               In certain circumstances, the Company’s Registered Office may be eliminated.

(e)                Companies’ records may be maintained either at the Company’s Records Office or at another location in electronic format, rather than in paper format, as long as the records are available for inspection and copying during statutory business hours by means of a computer terminal or other electronic technology.

(f)                 There are increased responsibilities on the person maintaining the Records Office.  Articles and other charter documents are no longer filed with the Registrar of Companies and the onus is on the person maintaining the Records Office to keep proper copies.

(g)                The Act requires that records be made available for inspection for two years after dissolution.

(h)                A Central Securities Register will replace the Registers of Members, Allotments and Transfers.

(i)                  An affidavit stating the purpose of the inspection is required to inspect the Central Securities Register or obtain a shareholders’ list.

(j)                 If a company refuses to give access to corporate records, the Registrar of Companies may order the company to give access to someone seeking access.

(k)               There are new requirements to keep current unaudited financial statements, consents to act as directors and resignations of directors, dissents of directors, and disclosures of interest and of financial assistance in the Company’s Records Book.  There is no longer any requirement to keep copies of documents approved by the directors, contracts issuing shares for non-cash consideration, mortgages, prospectuses and takeover bid circulars.  The registers of debentures and indebtedness are eliminated.

8.                  EXTRAPROVINCIAL COMPANIES:

(a)                Extraprovincial companies are no longer required to maintain records in British Columbia.

(b)               Extraprovincial companies are no longer required to list directors and officers.

(c)                The inability of an unregistered extraprovincial company to maintain an action or to own land will no longer apply.

(d)               An extraprovincial company may register under an assumed name and carry on business under that name if the name of the extraprovincial company seeking to register in British Columbia is not approved by the Registrar of Companies because of a conflict with the name of another company or for some other reason.

(e)                Extraprovincial companies must have at least one, and may have more than one, attorney, but the attorney must be either a British Columbia company or an individual.

(f)                 A federal company may appoint one or more attorneys (but is not required to).

(g)                Attorneys must list both a mailing address and a delivery address in British Columbia (which for pre-existing extraprovincial companies is the address shown by the Registrar for the existing attorney immediately prior to the New Act coming into force).

(h)                an attorney may resign after giving proper notice to the extraprovincial company and the appointment of an attorney can be revoked by the extraprovincial company.

9.                  MISCELLANEOUS:

(a)                Short form amalgamations without court approval are allowed.

(b)               Amalgamations between a British Columbia company and a corporation of another jurisdiction will be permitted in certain circumstances.

(c)                Three-cornered amalgamations (where shareholders receive shares of another corporation rather than shares of the amalgamated company) will be permitted.

(d)               Short form restorations without court approval are allowed.

(e)                Changes in designations:

(i)                  “member” becomes “shareholder”;

(ii)                “authorized capital” becomes “authorized share structure”;

(iii)               “Minute Book” becomes “Records Book”;

(iv)              “pro rata” becomes “rateable”.

(f)                 Fractional shares are permitted.

(g)                Changes of name, most capital alterations and changes to the Articles may be approved by the type of resolution specified in the Articles of the company, unless the Act specifically requires another type of resolution.  Consequently, some of these alterations could be approved by directors’ resolutions if the articles so provide.  If no provision is made in the Articles, such alterations must be made by special resolution.

(h)                The dissent provisions specifically relating to changes in the special rights and restrictions on the shares of the company have been removed.

(i)                  In certain cases, it is possible to validate the issue of shares by unanimous resolution rather than court order.

(j)                 There are more complex dissent proceedings.

(k)               It is possible to carry out a short-form dissolution (with a liquidator) when adequate provision has been made for the payment of liabilities.

(l)                  After dissolution, under certain circumstances shareholders may be liable for the debts of the company to the extent of the assets they received in connection with the dissolution.

(m)              Certain records must be filed with the Registrar of Companies electronically (incorporation, change of directors, change of offices, Annual Report, notice of alteration, amalgamation application, continuation application, and transition application).

(n)                Certain records (incorporation, change of name, etc.) filed with the Registrar of Companies may specify a future effective date (not more than 10 days from the filing date).

(o)               The Registrar may furnish records by fax or email.

(p)               The translation of the company’s name for use outside of Canada, or a change in the translation of the name, may be authorized by an ordinary or directors resolution.