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• (2) [Repealed, 1991, c. 45, s. 551]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  • (a) [Repealed, 2009, c. 23, s. 344]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.

Marginal note:Effect of certificate

9 A corporation comes into existence on the date shown in the certificate of incorporation.

Marginal note:Name of corporation

• 10 (1) The word or expression “Limited”, “Limitée”, “Incorporated”, “Incorporée”, “Corporation” or “Société par actions de régime fédéral” or the corresponding abbreviation “Ltd.”, “Ltée”, “Inc.”, “Corp.” or “S.A.R.F.” shall be part, other than only in a figurative or descriptive sense, of the name of every corporation, but a corporation may use and be legally designated by either the full or the corresponding abbreviated form.

• Marginal note:Saving for “S.C.C.”

  (1.1) Subsection (1) does not apply to a corporation that has a corporate name that, immediately before the day on which this subsection comes into force, included, other than only in a figurative or descriptive sense, the expression “Société commerciale canadienne” or the abbreviation “S.C.C.”, and any such corporation may use and be legally designated by either that expression or that abbreviation.

• Marginal note:Exemption

  (2) The Director may exempt a body corporate continued as a corporation under this Act from the provisions of subsection (1).

• Marginal note:Alternate name

  (3) Subject to subsection 12(1), the name of a corporation may be set out in its articles in an English form, a French form, an English form and a French form, or a combined English and French form, so long as the combined form meets the prescribed criteria. The corporation may use and may be legally designated by any such form.

• Marginal note:Alternative name outside Canada

  (4) Subject to subsection 12(1), a corporation may, for use outside Canada, set out its name in its articles in any language form and it may use and may be legally designated by any such form outside Canada.

• Marginal note:Publication of name

  (5) A corporation shall set out its name in legible characters in all contracts, invoices, negotiable instruments and orders for goods or services issued or made by or on behalf of the corporation.

• Marginal note:Other name

  (6) Subject to subsections (5) and 12(1), a corporation may carry on business under or identify itself by a name other than its corporate name if that other name does not contain, other than in a figurative or descriptive sense, either the word or expression “Limited”, “Limitée”, “Incorporated”, “Incorporée”, “Corporation” or “Société par actions de régime fédéral” or the corresponding abbreviation.

Marginal note:Reserving name

• 11 (1) The Director may, on request, reserve for a prescribed period a name for an intended corporation or for a corporation that intends to change its name.

• Marginal note:Designating number

  (2) If requested to do so by the incorporators or a corporation, the Director shall assign to the corporation as its name a designating number followed by the word “Canada” and a word or expression, or the corresponding abbreviation, referred to in subsection 10(1).

Marginal note:Prohibited names

• 12 (1) A corporation shall not be incorporated or continued as a corporation under this Act with, change its name to, or have, carry on business under or identify itself by a name that is prohibited by the regulations or that does not meet the prescribed requirements.

• Marginal note:Directing change of name

  (2) The Director may direct a corporation to change its name in accordance with section 173 if, through inadvertence or otherwise, the corporation acquires a name that is prohibited by the regulations or that does not meet the prescribed requirements.

• (3) [Repealed, 1994, c. 24, s. 7]

• Marginal note:Idem

  (4) If a corporation has a designating number as its name, the Director may direct the corporation to change its name to a name other than a designating number in accordance with section 173.

• Marginal note:Undertaking to change name

  (4.1) Where a corporation acquires a name as a result of a person undertaking to dissolve or to change names, and the undertaking is not honoured, the Director may direct the corporation to change its name in accordance with section 173, unless the undertaking is honoured within the period specified in subsection (5).

• Marginal note:Revoking name

  (5) If a corporation has not followed a directive under subsection (2), (4) or (4.1) within the prescribed period, the Director may revoke the name of the corporation and assign a name to it and, until changed in accordance with section 173, the name of the corporation is the name assigned by the Director.

Marginal note:Certificate of amendment

• 13 (1) When a corporation has had its name revoked and a name assigned to it under subsection 12(5), the Director shall issue a certificate of amendment showing the new name of the corporation and shall give notice of the change of name as soon as practicable in a publication generally available to the public.

• Marginal note:Effect of certificate

  (2) The articles of the corporation are amended accordingly on the date shown in the certificate of amendment.

Marginal note:Personal liability

• 14 (1) Subject to this section, a person who enters into, or purports to enter into, a written contract in the name of or on behalf of a corporation before it comes into existence is personally bound by the contract and is entitled to its benefits.

• Marginal note:Pre-incorporation and pre-amalgamation contracts

  (2) A corporation may, within a reasonable time after it comes into existence, by any action or conduct signifying its intention to be bound thereby, adopt a written contract made before it came into existence in its name or on its behalf, and on such adoption

  • (a) the corporation is bound by the contract and is entitled to the benefits thereof as if the corporation had been in existence at the date of the contract and had been a party thereto; and

  • (b) a person who purported to act in the name of or on behalf of the corporation ceases, except as provided in subsection (3), to be bound by or entitled to the benefits of the contract.

• Marginal note:Application to court

  (3) Subject to subsection (4), whether or not a written contract made before the coming into existence of a corporation is adopted by the corporation, a party to the contract may apply to a court for an order respecting the nature and extent of the obligations and liability under the contract of the corporation and the person who entered into, or purported to enter into, the contract in the name of or on behalf of the corporation. On the application, the court may make any order it thinks fit.

• Marginal note:Exemption from personal liability

  (4) If expressly so provided in the written contract, a person who purported to act in the name of or on behalf of the corporation before it came into existence is not in any event bound by the contract or entitled to the benefits thereof.