As a result of Alberta’s The Red Tape Reduction Implementation Act (RTRIA), two significant changes came into force on March 26, 2021 (retroactive to August 15, 2020) that affect all Corporations created under the Alberta Business Corporations Act (ABCA): Corporations are no longer required to have 1/4 of directors be resident in Alberta, and Agents for Service must be appointed for each and every Corporation.
Removal of Director Residency Requirements
Before these changes came into effect, any Corporation incorporated under the ABCA required 1/4 of its directors be resident in Alberta (section 105(3) of the ABCA). This section was repealed by the RTRIA and eliminated this requirement. As a result, there are no residency requirements for directors of Alberta corporations. However, this does not change the obligation that Corporations have registered offices in Alberta (section 20(1) of the ABCA), or any rules with respect to non-resident Canadian shareholders in distributing corporations carrying on business in Alberta.
Introduction of the Agent for Service
With the removal of the Director Residency requirements, the ABCA was further amended by the RTRIA to require that an Agent for Service be appointed for each Alberta Corporation under the newly introduced section 20.1 of the ABCA. An Agent for Service must be a resident Albertan with an office address accessible to the public during normal business hours. An Agent for Service can be changed at any time, and an Agent for Service can resign with 60-days’ notice provided to the registered office of the Corporation.
Changes to rules for Service on a Corporation
These changes also impact the rules for service on a Corporation under section 256 of the ABCA. In addition to serving the Corporation with legal documents (such as a Statement of Claim or Civil Claim used to commence legal proceedings against a Corporation) at its registered office or on a director personally, a Corporation can alternatively be served by delivering documents to its Agent for Service or by sending documents via registered mail to the registered address of the Agent for Service. These changes do provide some flexibility for individuals who hope to start doing business in Alberta but also create new requirements for many new and existing Corporations in Alberta.
To find out if these changes apply to you and your business, or to learn about the advantages that McCuaig Desrochers LLP can provide to you and your business, please contact McCuaig Desrochers LLP’s Business Law Practice Group.
This article was prepared by Jeff Arsenault, a lawyer with McCuaig Desrochers LLP
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