Important changes for nonprofits incorporated as Alberta Part 9 companies

On June 11, 2020, the Government of Alberta introduced Bill 22: Red Tape Reduction Implementation Act, 2020 in the Legislative Assembly for first reading. Bill 22, which includes amendments to the Companies Act, received royal assent on July 23, 2020. The Bill states that sections pertaining to the Companies Act come into force upon Proclamation.  

As of March 29, 2021, certain sections of the Red Tape Reduction Implementation Act, 2020 amending the Companies Act were proclaimed into force. We are still awaiting another proclamation relating to the remaining amendments, which could occur at any time.  

Bill 53, the Service Alberta Statutes (Virtual Meetings) Amendment Act was passed on March 26, 2021. This bill further amends the Companies Act (as well as other corporate statutes like the Societies Act) to allow for meetings and voting to occur online as opposed to in person, which has arisen as a necessity due to the COVID-19 Pandemic. These changes are retroactive and now have effect since August 15, 2020.

Does this affect your organization?  

There are more than 4,500 Part 9 Companies operating in Alberta. To find out if your organization was incorporated under the Companies Act, check the Alberta Non-Profit Listing or seek the services of an Alberta Corporate Registries agent.

Which changes to the Companies Act are in effect now?  

The amendments to the Companies Act that were proclaimed into force on March 29, 2021 are the requirements to appoint an “Agent for Service” and the elimination of certain Alberta residence requirements for Board of Directors. The provisions of the Service Alberta Statutes (Virtual Meetings) Amendment Act amending the Companies Act to allow for virtual meetings and electronic service are also in effect.  

Agent for Service  

A new section (s. 29.1) has been added to the Companies Act, requiring companies to appoint an “agent for service.”

This person will be able to accept service on behalf of the company for any process or suit. In other words, the person appointed as the agent for service provides an alternative to “serving” a company with documents in addition to the methods already permitted under section 308 of the Companies Act (sending the document to the company’s registered office, or to any director, manager or other officer of the company).

Now, official government notices, legal claims and other such documents will also be deemed to have been legally “served” if sent to the agent for service.  

The agent for service must be a resident Albertan, and their office must be accessible to the public during regular business hours. The agent for service must be an individual and is not required to be a lawyer or solicitor. A company also has the option of appointing an alternate agent for service. Alternate agents for service must be from the same firm as the primary agent.  Alternate agents for service may be located at an Alberta address that is different from the primary agent for service.  

The “agent for service” requirement has already gone into effect on the Alberta Corporate Registries system for all for all incorporations, amalgamations, continuances into Alberta, and revivals/restorations that occur on or after March 29, 2021.  Existing companies have until March 29, 2022 to appoint an agent for service. Failure to appoint an agent for service within one year could result in the eventual dissolution of the company. In order to appoint an agent for service, companies must send a notice of appointment of its agent for service to the Registrar. The form for the notice of appointment will be available for download on the Service Alberta website.  

Elimination of Residence Requirements for Directors  

Previously, section 90 the Companies Act required that at least 50% of the board of directors to be resident Albertans, and that the majority of board meetings had to be held within Canada. Both of these requirements have been eliminated by the amendments, meaning directors can now reside anywhere.  

Virtual Meetings  

The Service Alberta Statutes (Virtual Meetings) Amendment Act amends section 90 of the Companies Act such that meetings of the board may be held at any place within or outside Alberta, and, unless the company’s governing documents expressly provide otherwise, board meetings can take place by electronic means.  

Sections 149 and 150 of the Companies Act were also amended to allow for Annual General Meetings and General Meetings to be held entirely by electronic means, unless the company’s governing documents provide otherwise.  

Electronic Service

A new section (s. 308.02) has been added to the Companies Act, which allows for any notice or document that is required or permitted to be sent, served or delivered under the Act, regulations or articles of the company to be sent by electronic means in accordance with the Electronic Transactions Act.  

Which changes will come into effect later?  

Other changes that will come into effect at a later date include changes designed to make annual reporting less onerous; eliminating the requirement for Court approval of certain actions; and eliminating many redundant provisions that never had legal or practical application to Part 9 Companies.

If you have any questions with respect to this article, if you would like more detailed information on the current or proposed changes to the Companies Act, or if you require assistance complying with any of the new or proposed amended provisions, please do not hesitate to contact the team at IntegralOrg. Please reach out at admin@integralorg.ca or our Contact Us page.

Kristina Roberts is a lawyer with experience in public interest matters and social entrepreneurship. At IntegralOrg, Kristina is responsible for developing a toolkit to assist organizations and entrepreneurs with structuring social enterprises, as well as overseeing and assisting with various other legal initiatives relevant to the charitable and nonprofit sector and the organizations that IntegralOrg works with.   

Yvonne Chenier, QC, is a lawyer and philanthropy consultant –Yvonne brings more than 35 years of experience helping those in the philanthropic, nonprofit, and social enterprise sectors as general legal counsel and as an advisor on planning, organizational, regulatory and governance matters.