The Annual General Meeting (AGM) season for corporations has arrived. However, the outbreak of COVID-19 has caused corporations to reconsider their plans for the 2020 AGMs in the wake of bans on travel restrictions and on large gatherings.
Virtual AGMs can be held online without a corresponding physical meeting. Virtual meetings are sanctioned under corporate legislation, both federally and provincially. A virtual meeting is conducted completely by electronic or telephonic means. In a hybrid meeting there is both a physical meeting location and internet access to the meeting, allowing directors, shareholders or members to participate in person or electronically.
Under the federal Canada Business Corporations Act and the Canada Not-for-profit Corporations Act, a corporation’s bylaws must expressly allow the meeting to be held entirely by telephone or electronic means and the virtual platform must authorize all participants to communicate adequately with each other during the meeting.
Under the Ontario Business Corporations Act and the Corporations Act, meetings can be held by telephone or electronic means, unless the articles or bylaws provide otherwise. Unlike the federal legislation, in Ontario, there is no specific requirement that the platform must offer adequate communication among participants. The meaning of adequate communication has not yet been tested in court.
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In light of COVID 19, corporations should review their AGM arrangements. Corporations should consider proposing amendments of their constitutional documents to provide for hybrid or virtual meetings to deal with some of the problems that arise from holding a physical AGM.