Employment

Top U.S. Employment Law “Gotchas” for Canadian Companies

As a U.S. employment lawyer who advises numerous Canadian companies, I’ve seen several traps that Canadian companies frequently fall into. The first step in avoiding these traps is to identify them. At-Will Employment is Trap. One of the biggest differences between Canadian and U.S. Employment law is so called “at-will” employment. Theoretically, employers in the U.S. can fire employees without cause and not have to pay severance. But as I like to tell my clients, this means that you can fire employees in the U.S. for any reason you want … except for the 1.7 million reasons you can’t. If an employee is in a protected class (e.g. on the basis of age,...

SEC Rulemaking

EDGAR Next Mandatory Compliance Deadline Is Quickly Approaching

The September 12, 2025 deadline for EDGAR filers to complete their enrollment in the EDGAR system’s new login, password, and access protocols (these updates being referred to as “EDGAR Next”) is fast approaching.  EDGAR filers including SEC reporting companies, Canadian and other non-reporting companies that file Form D’s for their private placements, Canadian and other investors that file SEC beneficial ownership reports on Schedule 13D and 13G, and Canadian and other directors, officers and 10% shareholders that file ownership reports under Section 16, must all enroll in EDGAR Next by this deadline or they will lose the ability to make new filings on or after September 15, 2025. Filers can continue to enroll...

SEC Rulemaking

EDGAR Next is Live – What Canadian Issuers Need to Know

The SEC has updated the EDGAR system’s login, password, and access protocols which will affect Canadian SEC reporting companies and other individuals and entities with EDGAR filing codes, including non-reporting companies that file Form Ds for private placements, Section 16 filers, and investors that file on other reports such as Schedule 13D/G, Form 13F and Form 13G (referred to as “EDGAR Next”). Compliance with EDGAR Next protocols are now mandatory for new filers, while existing filers must comply starting September 15, 2025 and existing filers will have until December 19, 2025, to enroll in the EDGAR Next system. More information is available here.  

Corporate / Securities

FinCEN Eliminates Most Beneficial Ownership Reporting Under the CTA

In what will come as a relief to those Canadians and Canadian companies that own U.S. entities, on Friday, March 21, 2025, FinCEN announced an interim final rule that eliminates the requirement for U.S. entities to file beneficial ownership reports under the Corporate Transparency Act (CTA). U.S. entities will be exempt even if they are owned by a foreign person or foreign company.  As a result, only those foreign companies that directly register to do business in a U.S. jurisdiction will be required to file beneficial ownership reports under the CTA. More information is available in this eUpdate.

Capital Markets / SEC Rulemaking

Rule 506(c) Update: SEC Issues No-Action Letter Allowing Self-Certification of Accredited Investor Status in Certain Circumstances

On March 12, 2025, the staff at the Securities and Exchange Commission (SEC) Division of Corporate Finance issued a no-action letter in response to a request for Rule 506(c) interpretative guidance, agreeing that an issuer could reasonably conclude that it has taken reasonable steps to verify a purchaser’s accredited investor status in an offering of securities conducted under Rule 506(c) of Regulation D if the issuer requires purchasers to invest certain minimum investment amounts, when coupled with the purchaser’s written representations and certain related conditions as outlined in the incoming letter. Rule 506(c) of Regulation D permits issuers to broadly solicit and generally advertise an offering of securities, provided that: all purchasers in the...

Capital Markets / General

NYSE American Amends Shareholder Approval Requirements

The NYSE American stock exchange requires a listed company to obtain shareholder approval prior to issuing shares pursuant to (i) stock-based compensation plans, (ii) certain acquisitions and change of control transactions, and (iii) certain other transactions that may result in the issuance of more than 20% of the previously outstanding shares (the “20% Rule”).  Effective March 6, 2025, the NYSE American amended the 20% Rule.  Previously, the 20% Rule contained an exemption for (x) a transaction that the NYSE American deems to be a “public offering” under a multi-factor test (the “Public Offering Exception”), and (y) any other transaction at a price not less than the greater of book or market value per...

Corporate / Securities

CTA Will Now Apply Only to Foreign Reporting Companies

On February 27, 2025, FinCEN confirmed that it would halt enforcement actions in relation to the Corporate Transparency Act (“CTA”) while it developed revised regulations that would prioritize reporting for “those entities that pose the most significant law enforcement and national security risks.” On March 2, 2025, the U.S. Treasury Department confirmed that the scope of those new regulations would be limited to “foreign reporting companies” only, and that Treasury would not “enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect”. Essentially, the U.S. government has now abandoned the CTA for the vast majority of reporting companies that were covered under the prior...

International Trade

Dorsey Hosting Webinar on International Trade

On February 25th, Dorsey & Whitney LLP will be hosting a webinar on changes to U.S. trade policy as part of its International Business Roundtable Series. The webinar, International Trade: A First Look at the Second Trump Administration, U.S. Trade Policy, and Potential Impacts on U.S. Businesses, will feature discussions with representatives of Canada and Mexico and business leaders. Please use the link above to register for this event.

General

Trump Cites National Emergency to Launch Trade War Against Canada, China, and Mexico

ON FEBRUARY 6, 2025, AN UPDATE WAS ADDED TO THE END OF THIS POST. According to a White House Fact Sheet published on February 1, 2025, the Trump Administration followed through with its threat to impose high U.S. import tariffs on Canadian, Chinese, and Mexican origin products. These tariffs will subject many Canadian and Mexican origin products to a 25% import duty, while Chinese origin products will be subject to a 10% import duty. U.S. President Donald Trump invoked his authority under the International Emergency Economic Powers Act (“IEEPA”) to impose the sweeping tariffs, citing a national emergency relating to fentanyl trafficking and illegal border crossings. The Executive Order that targets Canada prescribes...

Tax

Certain Canadian Corporations May Unknowingly be Subject to U.S. Federal Backup Withholding and Reporting Requirements With Respect to Dividend Payments

Canadian corporations making dividend payments should ensure that they are compliant with U.S. federal backup withholding and reporting requirements to avoid potential U.S. federal income tax issues. Generally, a Canadian corporation making a payment of dividends aggregating USD$10 or more to another person during the calendar year is subject to the U.S. federal backup withholding and reporting regime. However, a dividend payment by a Canadian corporation is excluded from these rules if it is: from sources outside the United States; by a non-U.S. payor or a non-U.S. middleman; and paid and received outside the United States. For purposes of this discussion, a reference to a “Canadian corporation” does not otherwise include a Canadian...