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

Marginal note:Individual with significant control

• 2.1 (1) For the purposes of this Act, any of the following individuals is an individual with significant control over a corporation:

  • (a) an individual who has any of the following interests or rights, or any combination of them, in respect of a significant number of shares of the corporation:

    • (i) the individual is the registered holder of them,

    • (ii) the individual is the beneficial owner of them, or

    • (iii) the individual has direct or indirect control or direction over them;

  • (b) an individual who has any direct or indirect influence that, if exercised, would result in control in fact of the corporation; or

  • (c) an individual to whom prescribed circumstances apply.

• Marginal note:Joint ownership or control

  (2) Two or more individuals are each considered to be an individual with significant control over a corporation if, in respect of a significant number of shares of the corporation,

  • (a) an interest or right, or a combination of interests or rights, referred to in paragraph (1)(a) is held jointly by those individuals; or

  • (b) a right, or combination of rights, referred to in paragraph (1)(a) is subject to any agreement or arrangement under which the right or rights are to be exercised jointly or in concert by those individuals.

• Marginal note:Significant number of shares

  (3) For the purposes of this section, a significant number of shares of a corporation is

  • (a) any number of shares that carry 25% or more of the voting rights attached to all of the corporation’s outstanding voting shares; or

  • (b) any number of shares that is equal to 25% or more of all of the corporation’s outstanding shares measured by fair market value.

Application

Marginal note:Application of Act

• 3 (1) This Act applies to every corporation incorporated and every body corporate continued as a corporation under this Act that has not been discontinued under this Act.

• (2) [Repealed, 1991, c. 45, s. 551]

• Marginal note:Certain Acts do not apply

  (3) The following do not apply to a corporation:

  • (a) [Repealed, 2009, c. 23, s. 344]

  • (a.1) the Canada Not-for-profit Corporations Act;

  • (b) the Winding-up and Restructuring Act; and

  • (c) the provisions of a Special Act, as defined in section 87 of the Canada Transportation Act, that are inconsistent with this Act.

• Marginal note:Limitations on business that may be carried on

  (4) No corporation shall carry on the business of

  • (a) a bank;

  • (a.1) an association to which the Cooperative Credit Associations Act applies;

  • (b) a company or society to which the Insurance Companies Act applies; or

  • (c) a company to which the Trust and Loan Companies Act applies.

• Marginal note:Limitations on business that may be carried on

  (5) No corporation shall carry on business as a degree-granting educational institution unless expressly authorized to do so by a federal or provincial agent that by law has the power to confer degree-granting authority on an educational institution.

Purposes of Act

Marginal note:Purposes

4 The purposes of this Act are to revise and reform the law applicable to business corporations incorporated to carry on business throughout Canada, to advance the cause of uniformity of business corporation law in Canada and to provide a means of allowing an orderly transferance of certain federal companies incorporated under various Acts of Parliament to this Act.

PART IIIncorporation

Marginal note:Incorporators

• 5 (1) One or more individuals or bodies corporate may incorporate a corporation by signing articles of incorporation and complying with section 7.

• Marginal note:Individuals

  (2) An individual may incorporate a corporation only if that individual

  • (a) is not less than 18 years of age;

  • (b) is not incapable; or

  • (c) does not have the status of bankrupt.

Marginal note:Articles of incorporation

• 6 (1) Articles of incorporation shall follow the form that the Director fixes and shall set out, in respect of the proposed corporation,

  • (a) the name of the corporation;

  • (b) the province in Canada where the registered office is to be situated;

  • (c) the classes and any maximum number of shares that the corporation is authorized to issue, and

    • (i) if there will be two or more classes of shares, the rights, privileges, restrictions and conditions attaching to each class of shares, and

    • (ii) if a class of shares may be issued in series, the authority given to the directors to fix the number of shares in, and to determine the designation of, and the rights, privileges, restrictions and conditions attaching to, the shares of each series;

  • (d) if the issue, transfer or ownership of shares of the corporation is to be restricted, a statement to that effect and a statement as to the nature of such restrictions;

  • (e) the number of directors or, subject to paragraph 107(a), the minimum and maximum number of directors of the corporation; and

  • (f) any restrictions on the businesses that the corporation may carry on.

• Marginal note:Additional provisions in articles

  (2) The articles may set out any provisions permitted by this Act or by law to be set out in the by-laws of the corporation.

• Marginal note:Special majorities

  (3) Subject to subsection (4), if the articles or a unanimous shareholder agreement require a greater number of votes of directors or shareholders than that required by this Act to effect any action, the provisions of the articles or of the unanimous shareholder agreement prevail.

• Marginal note:Idem

  (4) The articles may not require a greater number of votes of shareholders to remove a director than the number required by section 109.

Marginal note:Delivery of articles of incorporation

7 An incorporator shall send to the Director articles of incorporation and the documents required by sections 19 and 106.

Marginal note:Certificate of incorporation

• 8 (1) Subject to subsection (2), on receipt of articles of incorporation, the Director shall issue a certificate of incorporation in accordance with section 262.

• Marginal note:Exception — failure to comply with Act

  (2) The Director may refuse to issue the certificate if a notice that is required to be sent under subsection 19(2) or 106(1) indicates that the corporation, if it came into existence, would not be in compliance with this Act.