Practice Watch

by Felicia S. Folk, Practice Advisor
New Business Corporations Act

The Business Corporations Act, SBC 2002, c. 57 comes into force on March 29, 2004, introducing both substantive and procedural changes in the incorporation, organization and activities of all British Columbia companies and the registration and obligations of all extraprovincial companies (collectively "companies").

The new Business Corporations Act, 2002 and amending statutes and the Business Corporations Regulation come into force on March 29, 2004. As of that date, the Corporate Registry will no longer accept paper forms for those filings that are available through the Registry's new Internet filing service, Corporate Online. For more information, visit the newly revised Business Corporations project website at

Lawyers must familiarize themselves with the requirements of the new Act. Here are some of the key changes.

Incorporations and other filings move online

The forms and process for corporate procedures will change. All companies will be incorporated online through an "Incorporation Application" web form on the Corporate Registry's new Corporate Online service. Other documents that are slated for online filing as of March 29 are the BC Annual Report, Extraprovincial Annual Report, Continuation Application, Transition Application, Notice of Alteration, Notice of Change of Address, Notice of Change of Directors, Amalgamation Application and Post Restoration Transition Application.

To obtain the most up-to-date information on the process and the latest version of all forms, check the Corporate Registry website at

New requirements ahead for registered and records offices

When the Act comes into force, all companies must have a "central securities register" that complies with the Act.

Generally the Registrar will play a reduced role in warehousing corporate documents and will no longer vet documents. For example, the Registrar will accept only a notice of articles (as prescribed), and not a full set of articles, from a newly formed company. This change means that law firms must be vigilant in ensuring that all corporate documentation is genuine, accurate and properly maintained.

A firm that intends to act as the registered and records office for a company must be accessible to the public during "statutory business hours" for the delivery of records. Companies' records may be inspected during statutory business hours and, although a company may by ordinary resolution restrict the times for access, the restriction must permit inspection during at least two consecutive hours a day.

Directors issues

A director's resignation now takes effect when it is provided "to the company or any lawyer for the company," unless a later date is specified in the resignation. All lawyers who act for a company must now be prepared to accept a resignation, note the time and date it is received and ensure that it is forwarded appropriately.

The articles of a company may transfer in whole or in part the powers of the directors to manage or supervise the business and the affairs of the company to one or more other persons (including shareholders). The persons to whom the powers have been transferred have all the rights, powers, duties and liabilities of the directors to the extent of the transfer. Lawyers who are dealing with companies with which they are not familiar should be watchful for the transfer of powers and liabilities.

Transition filing required within two years

Within two years of the Act coming into force, all companies must make a transition filing, or face dissolution by the Registrar.

There are many other aspects of the new Act that have not been explored here. The British Columbia Company Law Practice Manual, published by the CLE Society of BC, is a very useful resource. For more information, contact CLE at 604 669-3544 or 1-800-663-0437 or check the CLE website at

Thanks to Lenore Rowntree, Claims Counsel at the Lawyers Insurance Fund, for contributing this article to Practice Watch.

Refunds of PST for unpaid accounts

If you have claimed a refund for bad debts under the Social Service Tax Act, you may have received a letter from the Consumer Taxation Branch requiring you to provide the name and address of the clients whose accounts have been written off.

Section 5.19 of the regulations to the Act specifies that, when claiming a bad debt refund, the claimant must indicate the name and address of the purchaser whose account has been written off. However, in response to an enquiry from the Law Society, the Consumer Taxation Branch has now advised that, because of the unique nature of solicitor-client privilege, the Branch will accept a tax refund claim that identifies bad debt accounts for legal services by the client's file number rather than by the client's name and address.

The claim must still include the other supporting information specified in Consumer Taxation Branch Bulletin 010 - Refund of Tax Remitted on Sales Written Off as "Bad Debts." This bulletin says, in part, that the refund must contain the following information on a form or letter signed by the lawyer:

  • names and addresses of the purchasers (which in this case is the file number);
  • full amount of each sale and tax involved;
  • payment received from the client;
  • date the sale took place; and
  • a statement indicating the amount of payment received and the amount of tax claimed for reimbursement that has actually been written off as a bad debt and is not collectible.

If you have questions about PST, please contact Don Terrillon, Auditor, at the Law Society, at or 604 443-5798.