On March 12, 2023, the Saskatchewan Government enacted new legislation governing business corporations in Saskatchewan, The Business Corporations Act, 2021, SS 2021, c 6 (the "New Act"). The New Act replaces The Business Corporations Act, RSS 1978 c B-10 (the "Old Act"), which came into force in 1979.
The New Act continues to apply to all corporations carrying on business in Saskatchewan. It modernizes the Old Act to reflect changes in how business is conducted today, and to align with changes implemented in other provinces. The majority of the provisions are the same, but several significant changes have been made, including:
- updates to directors’ qualifications and obligations,
- requirements to maintain a register of individuals with significant control of the corporation, and
- providing for the ability to use electronic documents, communications, and signatures in conducting business for the corporation.
Under the Old Act, at least 25% of a corporation’s directors had to be resident Canadians – the New Act removes this requirement. Also, under the New Act, individuals are disqualified from acting as a director of a corporation if they have been convicted of an offence that is business-related or involving fraud. Finally, the New Act provides clarity regarding directors’ and officers’ responsibilities by setting out specific factors which should be considered when "acting in the best interests of the corporation".
Significant Control Register:
Perhaps the most significant change is the requirement that all corporations must now maintain a register of individuals with significant control over the corporation. Corporations must identify and keep specified information on each individual with significant control, and update that information on an annual basis. If a corporation fails to maintain this register, its directors may be charged with an offence, fined or in a severe case, imprisoned.
Modernizing the legislation to reflect how businesses operate, communicate with their shareholders, and hold meetings by facilitating the use of technology and electronic communication is also a significant benefit of the New Act. It may be necessary to make changes a corporation’s charter documents to take full advantage of this new flexibility.
We would be happy to provide you with additional information, and assist as required. Please contact one of our Business and Corporate Law lawyers.
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