Previously passed changes to the Business Corporations Act (Alberta) and the Companies Act (Alberta) are expected to be proclaimed in force by the Alberta Government on March 29, 2021. These changes will include the removal of director residency requirements and the creation of agent for service requirements under those statutes.
Gowling WLG focus
The removal of director residency requirements under the Business Corporations Act and the Companies Act aligns Alberta with other Canadian jurisdictions that do not have those requirements and reduces barriers for foreign-owned corporations, as outlined in our August 2020 article.
This is a fundamental change for current Alberta corporations and those considering doing business in Alberta. The removal of the director residency requirements allows Alberta to become a more appealing jurisdiction for establishing a presence in Canada. It is hoped that the flexibilities being introduced to Alberta's corporate law regime will help drive foreign investment into Alberta, and will have a positive economic impact, as the Province continues to transition into various industries and markets.
Removal of director residency requirements
It is expected that as of March 29, 2021 an Alberta company:
- incorporated under the Business Corporations Act will no longer be required to have at least 25% of its board of directors be Canadian residents; and
- incorporated under the Companies Act will no longer be required to have at least 50% of its board of directors be Canadian residents.
New agent for service requirement
With the removal of the director residency requirement, a new agent for service requirement will be imposed. All corporations and non-profit companies in Alberta will be required to appoint an agent for service who must:
- be a resident of Alberta; and
- have an address that is accessible to the public during normal business hours.
The requirement will come into effect on proclamation, but existing Alberta corporations and non-profit companies will have a one year grace period to appoint an agent for service. Failure to do so will result in the eventual dissolution of the corporation or company. To appoint an agent for service, existing Alberta corporations will need to send a notice of appointment to the Registrar.
All existing "attorneys for service" for corporations extra-provincially registered in Alberta will be converted to "agents for service" in the records of the Registrar. Any extra-provincial corporation that fails to abide by the agent for service requirement will have its extra-provincial registration cancelled.
We invite you to contact a member of Gowling WLG Calgary's Corporate Finance team if you have any questions regarding these upcoming changes.