Business Corporations Act: Red Tape Reduction Amendments


Recent amendments to the Business Corporations Act came into effect on March 29, 2021. The amendments were made by way of the Red Tape Reduction Implementation Act. While the amendments remove the Canadian residency requirements for corporate directors, they add a requirement for corporations to appoint an “agent for service” in Alberta.

1) Removal of Canadian Residency Requirements for Corporate Directors

The previous legislation contained a number of requirements related to corporate directors and Canadian residency. These requirements included:

  • 1/4 of the directors of a corporation must be Canadian residents
  • 1/4 of the directors present at a meeting must be Canadian residents otherwise the directors could not transact business
  • if the directors appoint a managing director, he or she must be a Canadian resident;
  • if the directors appoint a committee of directors, at least 1/4 of the members must be Canadian residents

All of these requirements have been removed.

2) Additional Requirement for an Agent of Service in Alberta

There is a new requirement for corporations to appoint an “agent for service”. The agent must reside in Alberta and have a mailing address for service within Alberta. A corporation must send a notice of appointment for the agent of service to the Registrar, as well as any notice of change in the name, address or other contact information for the agent. A corporation may also appoint an alternative agent for service if desired.

The corporation will also be required to maintain in its corporate records a consent from the agent consenting to act. An agent for service who resigns as agent is required to give the corporation 60 days’ notice of resignation.

The current “attorney for service” requirement for extra-provincially registered corporations has been changed to fit within the “agent for service” system. The same requirements apply regarding residency and mailing address. The Registrar will convert all existing attorneys for service to agents for service.

Existing corporations have one year in which to appoint an agent for service. Failure to appoint an agent for service by March 29, 2022 may result in the dissolution of the corporation by the Registrar.

A note about service: Corporations may now be served notices and documents by delivery or registered mail to its agent for service.

Corporations whose registered office is that of their lawyer may also want to appoint their lawyer as “agent for service”. Please discuss this option with your lawyer.

Our office would be happy to assist with any changes or appointments that arise as a result of these amendments.

This post is meant to provide information only and is not intended to provide legal advice. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this post to be outdated.

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