Canada Not-for-profit Corporations Act (S.C. 2009, c. 23)

Act current to 2019-06-20 and last amended on 2018-05-01. Previous Versions

PART 9Directors and Officers (continued)

Marginal note:Officers

 Subject to the articles, the by-laws and any unanimous member agreement,

  • (a) the directors may designate the offices of the corporation, appoint as officers persons of full capacity, specify their duties and delegate to them powers to manage the activities and affairs of the corporation, except powers to do anything referred to in subsection 138(2);

  • (b) a director may be appointed to any office of the corporation; and

  • (c) two or more offices of the corporation may be held by the same person.

Marginal note:Remuneration

  •  (1) Subject to the articles, the by-laws and any unanimous member agreement, the directors of a corporation may fix the reasonable remuneration of the directors, officers and employees of the corporation.

  • Marginal note:Services performed in other capacity

    (2) Subject to the by-laws, a director, an officer or a member may receive reasonable remuneration and expenses for any services to the corporation that are performed in any other capacity.

Marginal note:Indemnification

 Unless the by-laws of the corporation otherwise provide, a director, an officer or an employee may receive indemnification for their expenses incurred on behalf of the corporation as a director, an officer or an employee.

Marginal note:Directors’ liability

  •  (1) Directors of a corporation who vote for or consent to a resolution authorizing any of the following are jointly and severally, or solidarily, liable to restore to the corporation any money or other property so paid or distributed and not otherwise recovered by the corporation:

    • (a) a payment or distribution to a member, a director or an officer contrary to this Act; or

    • (b) a payment of an indemnity contrary to this Act.

  • Marginal note:Recovery of shares

    (2) A director who has satisfied a judgment rendered under this section is entitled to recover from the other directors who voted for or consented to the unlawful act on which the judgment was founded their respective shares.

  • Marginal note:Recovery

    (3) A director liable under subsection (1) is entitled to apply to a court for an order compelling a member or other recipient to pay or deliver to the director any money or other property that was paid or distributed to the member or other recipient contrary to this Act.

  • Marginal note:Order of court

    (4) On an application under subsection (3), a court may, if it is satisfied that it is equitable to do so, order a member or other recipient to pay or deliver to a director any money or other property that was paid or distributed to the member or other recipient contrary to this Act and make any further order that it thinks fit.

  • Marginal note:Limitation

    (5) An action to enforce a liability imposed by this section may not be commenced after two years from the date of the resolution authorizing the action complained of.

Marginal note:Liability of directors for wages

  •  (1) Directors of a corporation are jointly and severally, or solidarily, liable to employees of the corporation for all debts not exceeding six months’ wages payable to each employee for services performed for the corporation while they are directors.

  • Marginal note:Conditions precedent to liability

    (2) A director is not liable under subsection (1) unless

    • (a) the corporation has been sued for the debt within six months after it has become due and execution has been returned unsatisfied in whole or in part;

    • (b) the corporation has commenced liquidation and dissolution proceedings or has been dissolved and a claim for the debt has been proved within six months after the earlier of the date of commencement of the liquidation and dissolution proceedings and the date of dissolution; or

    • (c) the corporation has made an assignment or a receiving order has been made against it under the Bankruptcy and Insolvency Act and a claim for the debt has been proved within six months after the date of the assignment or receiving order.

  • Marginal note:Limitation

    (3) A director, unless sued for a debt referred to in subsection (1) while a director or within two years after ceasing to be a director, is not liable under this section.

  • Marginal note:Amount due after execution

    (4) If execution referred to in paragraph (2)(a) has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution.

  • Marginal note:Subrogation of director

    (5) A director who pays a debt referred to in subsection (1) that is proved in liquidation and dissolution or bankruptcy proceedings is subrogated to any priority that the employee would have been entitled to and, if a judgment has been obtained, the director is

    • (a) in Quebec, subrogated to the employee’s rights as declared in the judgment; and

    • (b) elsewhere in Canada, entitled to an assignment of the judgment.

  • Marginal note:Recovery of shares

    (6) A director who has satisfied a claim under this section is entitled to recover from the other directors who were liable for the claim their respective shares.

Marginal note:Dissent

  •  (1) A director who is present at a meeting of directors or of a committee of directors is deemed to have consented to any resolution passed or action taken at the meeting unless

    • (a) the director requests a dissent to be entered in the minutes of the meeting;

    • (b) the director sends a written dissent to the secretary of the meeting before the meeting is adjourned; or

    • (c) the director sends a dissent by registered mail or delivers it to the registered office of the corporation immediately after the meeting is adjourned.

  • Marginal note:Loss of right to dissent

    (2) A director who votes for or consents to a resolution is not entitled to dissent under subsection (1).

  • Marginal note:Dissent of absent director

    (3) A director who was not present at a meeting at which a resolution was passed or action taken is deemed to have consented to the resolution or action unless, within the prescribed period after becoming aware of the resolution or action, the director

    • (a) causes a dissent to be placed with the minutes of the meeting; or

    • (b) sends a dissent by registered mail or delivers it to the registered office of the corporation.

Marginal note:Duties of directors and officers

  •  (1) Every director and officer of a corporation in exercising their powers and discharging their duties shall

    • (a) act honestly and in good faith with a view to the best interests of the corporation; and

    • (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

  • Marginal note:Duty to comply

    (2) Every director and officer of a corporation shall comply with

    • (a) this Act and the regulations; and

    • (b) the articles, the by-laws and any unanimous member agreement.

  • Marginal note:Lawfulness of articles and purpose

    (3) Every director of a corporation shall verify the lawfulness of the articles and the purpose of the corporation.

  • Marginal note:No exculpation

    (4) Subject to subsection 170(5), no provision in a contract, the articles, the by-laws or a resolution relieves a director or an officer from the duty to act in accordance with this Act or the regulations or relieves them from liability for a breach of this Act or the regulations.

Marginal note:Director — reasonable diligence

  •  (1) A director is not liable under section 145 or 146, and has complied with his or her duties under subsection 148(2) and (3), if the director exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

    • (a) financial statements of the corporation represented to the director by an officer of the corporation or in a written report of the public accountant of the corporation fairly to reflect the financial condition of the corporation; or

    • (b) a report of a person whose profession lends credibility to a statement made by that person.

  • Marginal note:Director — good faith

    (2) A director has complied with his or her duties under subsection 148(1) if the director relied in good faith on

    • (a) financial statements of the corporation represented to the director by an officer of the corporation or in a written report of the public accountant of the corporation fairly to reflect the financial condition of the corporation; or

    • (b) a report of a person whose profession lends credibility to a statement made by that person.

 
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