Monday, 2 April 2012

Extraprovincial Registration and Territorial Competence

Section 375 of the Business Corporations Act provides that a "foreign entity" must register in B.C. as an extraprovincial company "within 2 months after the foreign entity begins to carry on business in British Columbia".  More specifically, s. 375(2) provides that a foreign entity is deemed to carry on business in B.C., inter alia, if it has a "resident agent" in B.C. or " it otherwise carries on business" in B.C.

In Moore v. NextEnergy Inc., 2012 BCSC 458, the court rejected the Defendant's argument that it did not fall within the ambit of this section because it did not have any officers, directors or an office in B.C.  Rather, relying on the facts that the Defendant did have two employees in B.C., a sales rep who distributed products in B.C., and a sales technician to assist with installation of the products, the court found that there was "an arguable case" that the Defendant carried on business in B.C.

Why is this particularly important? Because of s. 7 of the Court Jurisdiction and Proceedings Transfer Act, which provides that a corporation is ordinarily resident in B.C. and therefore is within the territorial jurisdiction (jurisdiction simpliciter) of B.C. courts if, inter alia:
(a) the corporation has or is required by law to have a registered office in British Columbia,
Having found that the Defendant was likely required to be extraprovincially registered, the court also found that it was ordinarily resident in B.C. and thus within the court's jurisdiction.