OBCA Modernization Takes Effect: Ontario Reduces Shareholder Approval Thresholds, Eliminates Director Residency Requirements

Gowling WLG previously discussed these changes in its October 2020 article. Notable changes coming into force on July 5 include:

• The elimination of the long-standing requirement that at least 25% of the directors of an Ontario corporation be Canadian residents; and
• The lowering of the approval threshold for written shareholder resolutions passed in lieu of a meeting, from unanimity to a majority, in the case of privately held corporations only.

Director residency requirement abolished for Ontario corporations

The elimination of the requirement that at least 25% of the directors of an Ontario corporation be Canadian residents is a welcome change as Ontario follows Alberta in instituting these changes and becomes one of several other Canadian jurisdictions free of such requirements. For foreign businesses, these changes provide the opportunity to revisit and adjust the board composition of their existing Ontario corporations or repatriate