Business Corporations Act

On March 29, 2004, the  new Business Corporations Act (BCA) took effect in BC after many years of discussion.  It makes extensive changes to corporate law and also "modernizes" some aspects of corporate law in British Columbia.  Some of the more significant corporate law changes  are in the following areas:

Incorporation Process

One or more persons (called 'incorporators' in the BCA) by entering into an incorporation agreement can apply to incorporate a corporation.  The agreement, together with the Articles, will now form the contract between the various shareholders and the corporation.

The Notice of Articles. takes the place of the Memorandum under the old Act.  This is the only document that is filed with the Registrar of Companies.  The Articles of the corporation are kept on file at the records office together with the Incorporation Agreement and other corporate documents such as the central securities register.

The Notice of Articles must be filed electronically through the internet portal set up by the Registrar of Companies.  Paper applications for incorporation will no longer be accepted.  The new service allows for incorporation on demand: as soon as you complete the Notice of Articles and submit it over the internet, the new corporation is established. 

For a more detailed discussion on how to incorporate a corporation, see the article How to Incorporate


Directors and Officers

There is no residency requirement for directors and officers of a corporation.  The BCA permits directors to show a 'prescribed address' as the address where  notices and other documents can be delivered or served on them.. 

A corporation no longer needs to have a president and a secretary.  A president does not have to be a director.

The Articles of the corporation can now transfer, in whole or in part, the powers of the directors to manage and supervise the affairs of the corporation.  The person to whom the powers are transferred will have all the powers, rights, duties and liabilities of a director.  Once the power is transferred, the directors are relieved of liability, rights and duties to the extent the powers are transferred.


Corporate & Capital Alterations

The articles can specify what type of resolution must be passed in order to make certain types of corporate alteration. For example, the articles could specify that only a 2/3 majority resolution is required for an alteration of the share capital.  If the articles contain provisions dealing with corporate alterations, then most such alterations can be done by simply passing the required resolution. The resolution, and the new share capital provisions are not filed with the Registrar of Companies.  The corporation only has to file a Notice of Alteration which would specify the new share capital..


It will be much easier to do amalgamations.  Both vertical and horizontal amalgamations can be done.  Also, it will be possible to do an amalgamation between a British Columbia corporation and a non-British Columbia corporation.  In many situations, the shareholders and the corporations involved will not have to enter into an amalgamation agreement.  Amalgamations can be done without court approval if creditors of the corporation will not be materially affected and the proper amalgamation procedures are followed.


Financial Assistance

Under the old  Company Act, a corporation was limited in providing financial assistance. The assets of the corporation could  not be used for the financial assistance of others except in certain limited situations.  Under the new BCA, the restrictions on financial assistance are removed. A corporation will be able to provide financial assistance to any person by any means and for any purpose.  In some circumstances, the fact the corporation has provided financial assistance must be disclosed in the records office.


By March 29, 2006, every corporation must do the following:

  • file the transition application
  • if necessary, change the existing articles to comply with the new legislation;
  • move certain provisions from the memorandum to the articles;
  • set  up a central securities register; 
  • provide the prescribed address for each officer and director.

If a corporation does not complete the transition by March 29, 2006, then that corporation could be dissolved by the Registrar of Companies and cease to exist.  Dissolution of a corporation has serious consequences so it is important that every existing corporation complete the transition.


If you have any questions on the issues discussed above, or on any legal issues  in general, please contact Sucha S. Ollek at: