The Advisory

Extra-Provincial Registration of Limited Liability Corporations

By Steve Raby, QC, Bencher

The ability to register a limited liability corporation extra-provincially in Alberta has been an issue for some time.

Typically, LLCs have a home jurisdiction somewhere in the United States. As these entities are loosely a hybrid between a partnership and a corporation, the issue has been whether they are capable of being registered in Alberta as an extra-provincial corporation, or whether they are more in the nature of a partnership.

Corporate registry has now established a policy to extra-provincially register a limited liability corporation provided that all documents are received as required by Section 280 of the Business Corporations Act. As well, a legal opinion is needed from a lawyer from the home jurisdiction of the LLC to the effect that the LLC is a body corporate as defined under the laws of its jurisdiction, rather than a partnership. If the LLC is more like a partnership than a corporation, then the LLC must be registered in Alberta as a partnership.

Further details on acceptable contents of the legal opinion from the home jurisdiction may be obtained from Corporate Registry.

Summary of Disciplinary Matters

Including Hearing Reports Released October 16, 2007 to December 31, 2007

In this Summary of Disciplinary Matters for the fourth quarter of 2007, the Law Society of Alberta seeks to educate and inform lawyers on its role as a self-regulator in the public interest. During this time, the LSA completed two hearings and issued four hearing reports, two of which are summarized below:

Suspension of A.

After a hearing Sept 10-12, 2007, a hearing committee of the LSA found the conduct of A. to be conduct deserving of sanction on three citations: failing to advise an unrepresented vendor in a real estate transaction to obtain independent legal advice and failing in his or her duty to that unrepresented party, failing to remit to that unrepresented party funds to which she was entitled and misleading the court at a hearing into a trusteeship application.

The hearing committee had in mind the following factors, among many: the need to maintain the public's confidence in the integrity of the profession, the ability of the profession to effectively govern its own members, specific deterrence of A. in further misconduct, general deterrence of others, and rehabilitation of A.

The hearing committee imposed a suspension of 45 days and ordered that A. pay actual costs of the hearing. A. is a sole practitioner who had no prior disciplinary record.

Reprimand of B.

On July 28, 2006, B. appeared before a hearing committee on seven citations. Both counsel for the LSA and C. agreed that B.'s conduct was conduct deserving of sanction, in that B. failed

to serve a client in a conscientious, diligent and efficient manner.

The hearing committee found several errors in B.'s conduct during the defense of the client. During the client's defense, among other things, B. failed to challenge the admissibility of a statement, failed to put the client's version of events to the detective and store clerk, erred in information given to the LSA, failed to interview the two character witnesses who attended the trial, and did not understand character evidence.

The committee was concerned about the breadth of those errors. Despite B.'s interest and enthusiasm in the area of criminal law, the committee stated that its overriding concern is the protection of the public and that B.'s mistakes were basic and fundamental.

Although the committee was close to declaring this was a result of incompetence, the committee believed the public could be protected by the following terms: B. to be mandated to work with Practice Review, to meet a board of examiners within six months, and not conduct a criminal file without the review of a senior practitioner until further order by Practice Review. A reprimand was issued and costs of $4,291.62 ordered to be paid.