Ontario Barrister and Solicitor Practice Exam

What must an OBCA corporation do to facilitate a going private transaction?

1. Send a circular not less than 20 days prior to the meeting.

2. Obtain a court order for the transaction.

3. Publish a public announcement in major newspapers.

4. Obtain independent valuation of securities affected and receive approval by vote of shareholders affected, excluding votes of shareholders with interest in the transaction.

The correct answer is: Obtain independent valuation of securities affected and receive approval by vote of shareholders affected, excluding votes of shareholders with interest in the transaction.

An OBCA corporation must obtain independent valuation of securities affected and receive approval by vote of shareholders affected. This option is correct because it is a requirement of the Ontario Business Corporations Act for a going private transaction. Option A is incorrect because the circular must be sent not less than 35 days prior to the meeting. Option B is incorrect because obtaining a court order is not required under the OBCA. Option C is incorrect because publishing a public announcement is not a requirement under the OBCA, although it may be a helpful step in informing shareholders.