On December 4th, 2009 the Québec National Assembly adopted the new Business Corporations Act (Bill 63 - the “QBCA”). It is expected to come into force in early 2011 and proposes a substantial reform of the legal regime applicable to entities currently governed by Parts I and IA of the Companies Act (Québec) (the “Old Act”)
The QBCA is intended to provide all the benefits of the federal and other provincial Corporations Acts with Québec specificities, by modernizing and streamlining the internal functioning of business corporations. This means less paper, less administration and more flexibility for all companies presently governed by the Old Act.
All existing companies incorporated under Part IA of the Old Act will be automatically continued as corporations under the QBCA, whereas companies governed by Part I of the Old Act must apply for continuance within 5 years of the QBCA coming into effect, failing which they will be automatically dissolved.
The QBCA will invalidate several articles of the present by-laws of Québec companies, which will eventually have to be amended or replaced in order to conform with the various legislative changes.
The QBCA will have an important impact on the functioning of business corporations, in particular: (i) unanimous shareholders’ agreements, (ii) financial assistance to shareholders, (iii) the maintenance of the share capital, (iv) the protection of minority shareholders, (v) the duties of directors, (vi) electronic filing of documents at the Enterprise Register, (vii) the use of technology for shareholder and board meetings, (viii) the simplification of the dissolution process and (ix) continuance into and out of Québec.
Furthermore, the new Act respecting the legal publicity of enterprises (Bill 87), which will come into effect at the same time as the QBCA, provides that the existence of a unanimous shareholders’ agreement must be declared to the Enterprise Registrar and may be consulted by the corporation's creditors. It should be noted that this change will apply to all business registered in the Province of Québec, whether or not they are governed by the new QBCA.