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

Marginal note:Notice of directors

• 106 (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 subsection (3.1) and 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 ending not later than the close of the third annual meeting of shareholders following the election.

• Marginal note:Election of directors — distributing corporations

  (3.1) Subject to paragraph 107(b), shareholders of a distributing 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 ending not later than the close of the next annual meeting of shareholders following the election.

• Marginal note:Exceptions — certain distributing corporations

  (3.2) Despite subsection (3.1), in the case of any prescribed class of distributing corporations or in any prescribed circumstances respecting distributing corporations or classes of distributing corporations, the directors are to be elected in accordance with subsection (3).

• Marginal note:Separate vote for each candidate

  (3.3) If the election of directors is for a prescribed corporation, a separate vote of shareholders shall be taken with respect to each candidate nominated for director.

• Marginal note:Majority voting

  (3.4) If, at a meeting of shareholders of a distributing corporation — other than in the case of a prescribed class of distributing corporations — at which an election of directors is required, there is only one candidate nominated for each position available on the board, each candidate is elected only if the number of votes cast in their favour represents a majority of the votes cast for and against them by the shareholders who are present in person or represented by proxy, unless the articles require a greater number of votes.

• 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) Despite subsections (2), (3) to (3.2) and (5) and subject to subsection (6.1), if directors are not elected at a meeting of shareholders, the incumbent directors continue in office until their successors are elected.

• Marginal note:Incumbent director not elected

  (6.1) If an incumbent director who was a candidate in an election held in accordance with subsection (3.4) was not elected during the election, the director may continue in office until the earlier of

  • (a) the 90th day after the day of the election; and

  • (b) the day on which their successor is appointed or elected.

• Marginal note:Vacancy

  (7) If, for either of the following reasons, a meeting of shareholders fails to elect the number or the minimum number of directors required by the articles, the directors elected at that meeting may exercise all the powers of the directors if the number of directors so elected constitutes a quorum:

  • (a) a lack of consent, disqualification under subsection 105(1) or the death of any candidates; or

  • (b) a lack of a majority referred to in subsection (3.4).

• Marginal note:Appointment of directors

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

• Marginal note:Exception

  (8.1) If an individual who was a candidate in an election held in accordance with subsection (3.4) was not elected during that election, the individual is not to be appointed, except in prescribed circumstances, as a director under subsection (8) or 111(1) before the next meeting of shareholders at which an election of directors is required.

• 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.

Marginal note:Cumulative voting

107 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.

Marginal note:Ceasing to hold office

• 108 (1) A director of a corporation ceases to hold office when the director

  • (a) dies or resigns;

  • (b) is removed in accordance with section 109; or

  • (c) becomes disqualified under subsection 105(1).

• Marginal note:Effective date of resignation

  (2) A resignation of a director becomes effective at the time a written resignation is sent to the corporation, or at the time specified in the resignation, whichever is later.

Marginal note:Removal of directors

• 109 (1) Subject to paragraph 107(g), the shareholders of a corporation may by ordinary resolution at a special meeting remove any director or directors from office.

• Marginal note:Exception

  (2) Where the holders of any class or series of shares of a corporation have an exclusive right to elect one or more directors, a director so elected may only be removed by an ordinary resolution at a meeting of the shareholders of that class or series.

• Marginal note:Vacancy

  (3) Subject to paragraphs 107(b) to (e), a vacancy created by the removal of a director may be filled at the meeting of the shareholders at which the director is removed or, if not so filled, may be filled under section 111.

• Marginal note:Resignation (or removal)

  (4) If all of the directors have resigned or have been removed without replacement, a person who manages or supervises the management of the business and affairs of the corporation is deemed to be a director for the purposes of this Act.

• Marginal note:Exception

  (5) Subsection (4) does not apply to

  • (a) an officer who manages the business or affairs of the corporation under the direction or control of a shareholder or other person;

  • (b) a lawyer, notary, accountant or other professional who participates in the management of the corporation solely for the purpose of providing professional services; or

  • (c) a trustee in bankruptcy, receiver, receiver-manager, sequestrator or secured creditor who participates in the management of the corporation or exercises control over its property solely for the purpose of the realization of security or the administration of a bankrupt’s estate, in the case of a trustee in bankruptcy.

Marginal note:Attendance at meeting

• 110 (1) A director of a corporation is entitled to receive notice of and to attend and be heard at every meeting of shareholders.

• Marginal note:Statement of director

  (2) A director who

  • (a) resigns,

  • (b) receives a notice or otherwise learns of a meeting of shareholders called for the purpose of removing the director from office, or

  • (c) receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed or elected to fill the office of director, whether because of the director’s resignation or removal or because the director’s term of office has expired or is about to expire,

  is entitled to submit to the corporation a written statement giving reasons for resigning or for opposing any proposed action or resolution.

• Marginal note:Circulating statement

  (3) A corporation shall forthwith send a copy of the statement referred to in subsection (2) to every shareholder entitled to receive notice of any meeting referred to in subsection (1) and to the Director unless the statement is included in or attached to a management proxy circular required by section 150.

• Marginal note:Immunity

  (4) No corporation or person acting on its behalf incurs any liability by reason only of circulating a director’s statement in compliance with subsection (3).

Marginal note:Filling vacancy

• 111 (1) Despite subsection 114(3), but subject to subsections (3) and (4), a quorum of directors may fill a vacancy among the directors, except a vacancy resulting from an increase in the number or the minimum or maximum number of directors or a failure to elect the number or minimum number of directors provided for in the articles.

• Marginal note:Calling meeting

  (2) If there is not a quorum of directors or if there has been a failure to elect the number or minimum number of directors provided for in the articles, the directors then in office shall without delay call a special meeting of shareholders to fill the vacancy and, if they fail to call a meeting or if there are no directors then in office, the meeting may be called by any shareholder.

• Marginal note:Class director

  (3) If the holders of any class or series of shares of a corporation have an exclusive right to elect one or more directors and a vacancy occurs among those directors,

  • (a) subject to subsection (4), the remaining directors elected by the holders of that class or series of shares may fill the vacancy except a vacancy resulting from an increase in the number or the minimum or maximum number of directors for that class or series or from a failure to elect the number or minimum number of directors provided for in the articles for that class or series; or

  • (b) if there are no remaining directors any holder of shares of that class or series may call a meeting of the holders of shares of that class or series for the purpose of filling the vacancy.

• Marginal note:Shareholders filling vacancy

  (4) The articles may provide that a vacancy among the directors shall only be filled by a vote of the shareholders, or by a vote of the holders of any class or series of shares having an exclusive right to elect one or more directors if the vacancy occurs among the directors elected by that class or series.

• Marginal note:Unexpired term

  (5) A director appointed or elected to fill a vacancy holds office for the unexpired term of their predecessor.

Marginal note:Number of directors

• 112 (1) The shareholders of a corporation may amend the articles to increase or, subject to paragraph 107(h), to decrease the number of directors, or the minimum or maximum number of directors, but no decrease shall shorten the term of an incumbent director.

• Marginal note:Election of directors where articles amended

  (2) Where the shareholders at a meeting adopt an amendment to the articles of a corporation to increase or, subject to paragraph 107(h) and to subsection (1), decrease the number or minimum or maximum number of directors, the shareholders may, at the meeting, elect the number of directors authorized by the amendment, and for that purpose, notwithstanding subsections 179(1) and 262(3), on the issue of a certificate of amendment the articles are deemed to be amended as of the date the shareholders adopt the amendment.

Marginal note:Notice of change of director or director’s address

• 113 (1) A corporation shall, within fifteen days after

  • (a) a change is made among its directors, or

  • (b) it receives a notice of change of address of a director referred to in subsection (1.1),

  send to the Director a notice, in the form that the Director fixes, setting out the change, and the Director shall file the notice.

• Marginal note:Director’s change of address

  (1.1) A director shall, within fifteen days after changing his or her address, send the corporation a notice of that change.

• Marginal note:Application to court

  (2) Any interested person, or the Director, may apply to a court for an order to require a corporation to comply with subsection (1), and the court may so order and make any further order it thinks fit.