Canada Business Corporations Act

Marginal note:Qualifications of directors

• 105 (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.