Changes are on the way for Ontario’s Business Laws
The Ontario government has appointed an advisory panel that will help reform the province’s business laws.
Following a series of recommendations made by the Business Law Agenda Stakeholder Panel earlier this year, Ontario could soon see substantial reforms to its business laws, according to the website for the Government of Ontario. The government is creating a new advisory council that will be responsible for recommending changes to business law in Ontario, which will, according to the government, help ensure that Ontario’s commercial and corporate laws are kept continuously up-to-date. Additionally, a number of business reform laws that have already been proposed are slated to come into effect by the end of 2015.
Changes in Ontario’s Business Law
The Business Law Agenda Stakeholder Panel recommended in June 2015 that the government make changes to 19 of the province’s commercial and corporate laws. As the Globe and Mail reports, the panel’s major recommendations included greater shareholder power and changes to current residency requirements for companies’ boards.
For example, the panel recommended allowing shareholders to vote against a director. Currently in Ontario, as elsewhere in Canada, shareholders can either withhold their vote, in which case their vote is not included in the final count, or they can vote for the director. Shareholder advocates complain that the current system is undemocratic and allows for directors to be elected even when a majority of shareholders are opposed to their appointments.
Furthermore, current law requires 25 percent of board members to be Canadian residents, a requirement that critics say is outdated and especially difficult for companies with smaller boards to comply with. Those critics also point out that many Canadian jurisdictions have already eliminated residency requirements.
Business Law Advisory council
As part of the process of reforming business law, the recently appointed advisory council will perform an important role. The advisory council will make ongoing recommendations to the government about reforming and updating specific business laws.
Additionally, the government says a number of changes to major corporate and commercial legislation will go into effect by the end of the year. Some of the changes, for example, include reducing from two to one the number of signatures required when approving financial statements, allowing only independent auditors to carry out business audits, and allowing companies to amend a signed contract before the contract has actually been adopted.
Business law advice
With business law set for important reforms in the coming months and years, it is important for businesses themselves to understand how such changes may affect them. Business owners should reach out to a qualified business lawyer to make sure the legal side of their business is properly taken care of. By contacting such a lawyer today, owners can instead focus on their primary task of developing and expanding their businesses.