Yes, Mr. Chairman. Mr. Chairman, a consultation draft of the Business Corporations Act was released to the public and specifically circulated to the business community and the legal and accounting professions for their comments.
After considering responses which were received and amendments which have been made or are being considered as similar legislation elsewhere, an updated version of the bill was introduced this past spring.
This Act would replace the present Companies Act and the Companies Winding-Up Act. Current legislation has not be adapted to current commercial practices and in a number of areas overlaps with personal property security legislation and securities legislation.
In the past twenty years most of the provinces and the Yukon have adopted similar legislation. The Business Corporations Act would strike a more appropriate balance in respect of the rights of majority and minority shareholders, creditors and the public dealing with the companies, than is presently the case.
At the same time, we would simplify procedures, eliminate unnecessary applications to the court and eliminate areas of duplication with other legislation.
For the benefit of those Members who are not on the Standing Committee which reviewed this bill, the new act would:
1) simplify the procedure for incorporation, including elimination of the requirement to specify the objectives of the company and the requirement that each company have at least two shareholders.
2) improve the process for the approval of company names.
3) provide greater flexibility in the share structure and in the relations between shareholders.
4) simplify the procedure for amendments to the corporation's share capital, and for amalgamations, including reducing the requirements for court approval of these fundamental changes. This is achieved in part by providing for specific rights for minority shareholders who are not in agreement with the fundamental changes.
5) simplify the procedures for dissolving and reviving companies, including dispensing with the requirement for court approval in most instances.
6) eliminate unnecessary court applications while allowing recourse to the courts in the case of legitimate problems, in particular, where the minority shareholders are oppressed by the majority shareholders.
The Companies Act now provides that almost all fundamental changes to a corporation require the approval of the court, even where there are no shareholders who disagree with the changes. In other cases, the concerns of minority shareholders are not adequately addressed. It should also be mentioned that the Act has been drafted with division of the Territories in mind. All transitional requirements under the new Act must be completed by March 31, 1999 at which point the Companies Act and Companies Winding-up Act are repealed.
The proposed bill is lengthy and complex, but no more so than the present law in this area. By establishing a greatly improved legal framework within which existing and future Northwest Territories companies may operate, the bill should have the affect of facilitating economic development in the north.
In closing, I would thank the Members of the Standing Committee for their review and support of this bill. Thank you Mr. Chairman.