Nova Scotia Direction Provides Flexibility for Shareholder, Member and Director Meetings during COVID-19

Nova Scotia Direction Provides Flexibility for Shareholder, Member and Director Meetings during COVID-19

April 16, 2020

The Nova Scotia government has clarified how incorporated entities can meet both their statutory meeting obligations and abide by pandemic-related public health orders.

The April 11 direction from government says incorporated entities in Nova Scotia can now hold virtual meetings to meet their statutorily required obligations or can defer meetings for a limited period.

And if entities choose to proceed with their meetings with more than five persons present, in violation of health orders, the entity could be subject to a fine, per incident, of up to $10,000 for individuals and $100,000 for the corporation.

Prior to this new direction from government, relevant legislation was silent on alternative meeting measures that could be taken in response to the current pandemic. The new direction covers all companies, co-operatives, societies and other bodies incorporated by or under the laws of Nova Scotia.

Meetings held virtually shall be deemed in-person meetings held at the place outlined in the applicable enactment, article, by-law, or governing agreement. Every person entitled to be present who attends the meeting by way of telephonic or electronic means will be deemed present at the meeting. All other requirements, such as notice, quorum and record, must still be met.

Meetings can also be deferred without penalty or recourse for a period of up to 90 calendar days after the last date of the state of emergency. All persons entitled to vote must be notified of the deferral and notice must be provided in the manner prescribed by the applicable enactment, article, by-law, or governing agreement.

The direction was made retroactive to the March 22, 2020 declaration of a state of emergency and will remain in force until the state of emergency is terminated by the Minister of Municipal Affairs and Housing. The direction applies regardless of any enactment, by-law, article or governing agreement stating otherwise.

While the direction provides important guidance to corporate entities, it also highlights the need for current legislation in Nova Scotia to be updated, like the Canada Business Corporation Act and the Canadian Not-for-profit Corporations Act to include alternative means of holding meetings.

For more information on annual general meetings, including updated requirements due to the COVID-19 pandemic, please contact David A. Reid, chair of the Business Group of Cox & Palmer’s Halifax Office.  This article was written with contributions from Drew Ritchie, articled clerk at Cox & Palmer.

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