12-Jan-1998
Everyone who deals with the Companies Act (Nova Scotia) should be aware of significant changes which became law on December 3, 1998:
- Nova Scotia companies can now give security for borrowings without requiring a shareholders’ special resolution. This will mean that Nova Scotia companies with typical articles of association will only need a directors’ resolution to borrow, guarantee and give security.
- When one transfers property to a Nova Scotia company in exchange for shares it is no longer necessary to file the agreement providing for the share issue. Under previous law, unless the agreement was filed on or before the share issue date or a late filing order was obtained from the Court, the shares were considered not to have been paid for. The amendments have preserved the ability to get late filing orders where shares were issued for non-cash consideration before the amendment came into effect without an agreement, or a sufficient agreement, having been filed.
- Nova Scotia limited companies can now have “Inc.”, “Ltd.” or their French equivalents as part of their formal name. Please note however that companies formally named “Limited” or “Incorporated” can still use the abbreviated form for any purpose. The Registrar’s office is not yet equipped to handle short formal names and you should expect delays incorporating such a company before early 1999. There continue to be no statutory naming rules for unlimited companies.
The amendments, all found in the Business Efficiency (1998) Act, also somewhat simplify the incorporation process. The overall effect of the changes is to eliminate certain of the more unfriendly provisions of the Companies Act and there should be no negative consequences for those using Nova Scotia companies.
The information contained in this Client Update is intended for general information only. Please contact any member of our Corporate/Commercial Group in Halifax for additional information.
Stewart McKelvey Stirling Scales
Suite 900, Purdy’s Wharf Tower One
1959 Upper Water Street
P.O. Box 997
Halifax NS B3J 2X2
Telephone: 902.420.3200
Facsimile: 902.420.1417
E-mail Address: smss.com
