Canada Business Corporations Act (R.S.C., 1985, c. C-44)

Act current to 2017-11-20 and last amended on 2015-02-26. Previous Versions

Marginal note:Organization meeting
  •  (1) After issue of the certificate of incorporation, a meeting of the directors of the corporation shall be held at which the directors may

    • (a) make by-laws;

    • (b) adopt forms of security certificates and corporate records;

    • (c) authorize the issue of securities;

    • (d) appoint officers;

    • (e) appoint an auditor to hold office until the first annual meeting of shareholders;

    • (f) make banking arrangements; and

    • (g) transact any other business.

  • Marginal note:Exception

    (2) Subsection (1) does not apply to a body corporate to which a certificate of amalgamation has been issued under subsection 185(4) or to which a certificate of continuance has been issued under subsection 187(4).

  • Marginal note:Calling meeting

    (3) An incorporator or a director may call the meeting of directors referred to in subsection (1) by giving not less than five days notice thereof by mail to each director, stating the time and place of the meeting.

  • 1974-75-76, c. 33, s. 99;
  • 1978-79, c. 9, ss. 1(F), 28.
Marginal note:Qualifications of directors
  •  (1) The following persons are disqualified from being a director of a corporation:

    • (a) anyone who is less than eighteen years of age;

    • (b) anyone who is of unsound mind and has been so found by a court in Canada or elsewhere;

    • (c) a person who is not an individual; or

    • (d) a person who has the status of bankrupt.

  • Marginal note:Further qualifications

    (2) Unless the articles otherwise provide, a director of a corporation is not required to hold shares issued by the corporation.

  • Marginal note:Residency

    (3) Subject to subsection (3.1), at least twenty-five per cent of the directors of a corporation must be resident Canadians. However, if a corporation has less than four directors, at least one director must be a resident Canadian.

  • Marginal note:Exception — Canadian ownership or control

    (3.1) If a corporation engages in an activity in Canada in a prescribed business sector or if a corporation, by an Act of Parliament or by a regulation made under an Act of Parliament, is required, either individually or in order to engage in an activity in Canada in a particular business sector, to attain or maintain a specified level of Canadian ownership or control, or to restrict, or to comply with a restriction in relation to, the number of voting shares that any one shareholder may hold, own or control, then a majority of the directors of the corporation must be resident Canadians.

  • Marginal note:Clarification

    (3.2) Nothing in subsection (3.1) shall be construed as reducing any requirement for a specified number or percentage of resident Canadian directors that otherwise applies to a corporation referred to in that subsection.

  • Marginal note:If only one or two directors

    (3.3) If a corporation referred to in subsection (3.1) has only one or two directors, that director or one of the two directors, as the case may be, must be a resident Canadian.

  • Marginal note:Exception for holding corporation

    (4) Despite subsection (3.1), not more than one third of the directors of a holding corporation referred to in that subsection need be resident Canadians if the holding corporation earns in Canada directly or through its subsidiaries less than five per cent of the gross revenues of the holding corporation and all of its subsidiary bodies corporate together as shown in

    • (a) the most recent consolidated financial statements of the holding corporation referred to in section 157; or

    • (b) the most recent financial statements of the holding corporation and its subsidiary bodies corporate as at the end of the last completed financial year of the holding corporation.

  • R.S., 1985, c. C-44, s. 105;
  • 2001, c. 14, s. 37.
Marginal note:Notice of directors
  •  (1) At the time of sending articles of incorporation, the incorporators shall send to the Director a notice of directors in the form that the Director fixes, and the Director shall file the notice.

  • Marginal note:Term of office

    (2) Each director named in the notice referred to in subsection (1) holds office from the issue of the certificate of incorporation until the first meeting of shareholders.

  • Marginal note:Election of directors

    (3) Subject to paragraph 107(b), shareholders of a corporation shall, by ordinary resolution at the first meeting of shareholders and at each succeeding annual meeting at which an election of directors is required, elect directors to hold office for a term expiring not later than the close of the third annual meeting of shareholders following the election.

  • Marginal note:Staggered terms

    (4) It is not necessary that all directors elected at a meeting of shareholders hold office for the same term.

  • Marginal note:No stated terms

    (5) A director not elected for an expressly stated term ceases to hold office at the close of the first annual meeting of shareholders following the director’s election.

  • Marginal note:Incumbent directors

    (6) Notwithstanding subsections (2), (3) and (5), if directors are not elected at a meeting of shareholders the incumbent directors continue in office until their successors are elected.

  • Marginal note:Vacancy among candidates

    (7) If a meeting of shareholders fails to elect the number or the minimum number of directors required by the articles by reason of the lack of consent, disqualification, incapacity or death of any candidates, the directors elected at that meeting may exercise all the powers of the directors if the number of directors so elected constitutes a quorum.

  • Marginal note:Appointment of directors

    (8) The directors may, if the articles of the corporation so provide, appoint one or more additional directors, who shall hold office for a term expiring not later than the close of the next annual meeting of shareholders, but the total number of directors so appointed may not exceed one third of the number of directors elected at the previous annual meeting of shareholders.

  • Marginal note:Election or appointment as director

    (9) An individual who is elected or appointed to hold office as a director is not a director and is deemed not to have been elected or appointed to hold office as a director unless

    • (a) he or she was present at the meeting when the election or appointment took place and he or she did not refuse to hold office as a director; or

    • (b) he or she was not present at the meeting when the election or appointment took place and

      • (i) he or she consented to hold office as a director in writing before the election or appointment or within ten days after it, or

      • (ii) he or she has acted as a director pursuant to the election or appointment.

  • R.S., 1985, c. C-44, s. 106;
  • 1994, c. 24, s. 11;
  • 2001, c. 14, ss. 38, 135(E).
Marginal note:Cumulative voting

 Where the articles provide for cumulative voting,

  • (a) the articles shall require a fixed number and not a minimum and maximum number of directors;

  • (b) each shareholder entitled to vote at an election of directors has the right to cast a number of votes equal to the number of votes attached to the shares held by the shareholder multiplied by the number of directors to be elected, and may cast all of those votes in favour of one candidate or distribute them among the candidates in any manner;

  • (c) a separate vote of shareholders shall be taken with respect to each candidate nominated for director unless a resolution is passed unanimously permitting two or more persons to be elected by a single resolution;

  • (d) if a shareholder has voted for more than one candidate without specifying the distribution of votes, the shareholder is deemed to have distributed the votes equally among those candidates;

  • (e) if the number of candidates nominated for director exceeds the number of positions to be filled, the candidates who receive the least number of votes shall be eliminated until the number of candidates remaining equals the number of positions to be filled;

  • (f) each director ceases to hold office at the close of the first annual meeting of shareholders following the director’s election;

  • (g) a director may be removed from office only if the number of votes cast in favour of the director’s removal is greater than the product of the number of directors required by the articles and the number of votes cast against the motion; and

  • (h) the number of directors required by the articles may be decreased only if the votes cast in favour of the motion to decrease the number of directors is greater than the product of the number of directors required by the articles and the number of votes cast against the motion.

  • R.S., 1985, c. C-44, s. 107;
  • 2001, c. 14, ss. 39(E), 135(E).
 
Date modified: