Bill 152, Pending Changes To The OBCA And The Partnerships Act

Clients should be aware that Bill 152, which received Royal Assent on December 20, 2006, and which will come into force on August 1, 2007, will make significant changes to the Business Corporations Act ("OBCA") as well as an important change to the limited liability shield for limited liability partnerships ("LLPs") under the Partnerships Act (Ontario). What follows summarizes the highlights.

Bill 152 will reduce the usual residency requirement for directors of an OBCA corporation from a majority (51%) to 25% of the directors. This conforms to the board residency threshold under the Canada Business Corporations Act ("CBCA") and recent changes made to the general corporate statutes of Alberta, Saskatchewan and Manitoba. It appears that the Ontario government was concerned that elimination of the residency requirement entirely would make it more difficult to enforce provincial tax statutes against corporations conducting business in Ontario