On May 1, 2015, amendments to the Business Corporation Act (Yukon) (the Act) came into force. The amendments modernize rules but some amendments are unique to the Yukon and are intended to attract companies to incorporate in the Yukon.
The particularly noteworthy amendments in the Act include:
- a corporation can now serve as a director of a subsidiary registered in the Yukon. Since directors are normally people and not corporations, liability will apply to the directors of the parent corporation that owns the Yukon subsidiary. The directors will share joint and several liability;¹
- a director is permitted to appoint another director to act as his/her proxy to vote on his/her behalf at a meeting;
- if provided for by unanimous shareholders’ agreement, a corporation is not required to have directors at all;
- a corporation may add provisions in its articles of incorporation giving blanket approval to its directors sell the corporation’s assets without requiring a shareholder vote;
- a director may personally take advantage of business opportunities that are rejected by its board; and
- the corporate records office may be located outside of the Yukon provided the records are accessible by electronic means.
These amendments together with the provision in the Act that directors do not have to be Canadian residents will likely invite new business registrations in the Yukon. Although time will dictate the long-term impact of these amendments, one of these two outcomes may occur: the Yukon may become Canada’s “Delaware North” or shareholders’ rights may become greatly eroded. A follow-up article about these amendments will be forthcoming.
This article contains general information only and is not intended to provide a legal opinion or advice. Please consult a lawyer or compliance advisor for matters related to your situation before relying on any of the statements made in this article.
- In all other Canadian jurisdictions, directors must be people.