On Dec. 4, 2023, the Less Red Tape, More Common Sense Act, 2023 received Royal Assent, bringing an important amendment to the Corporations Act (Ontario) into force.
As set out in a previous BLG Insight: Not-for-Profit Corporations Act, 2010 (ONCA): Understanding share capital social clubs, social companies governed by the Corporations Act (Ontario) have until Oct.19, 2026 to decide whether to continue under the new Not-for-Profit Corporations Act, 2010 (Ontario), the Business Corporations Act (Ontario) or the Co-operative Corporations Act (Ontario) or they will be dissolved.
Section 2.1(4) of the Corporations Act (Ontario) previously provided that each class of shareholders needed to approve the continuance, but, as of Dec. 4, 2023, that section is repealed, and the continuance will only need to be approved by shareholders who hold shares that have the right to vote. This should greatly simplify the continuance process for clubs with legacy non-voting shareholders who are largely uninvolved in the club.
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