Canada Business Corporations Act

Marginal note:Qualification of auditor

• 161 (1) Subject to subsection (5), a person is disqualified from being an auditor of a corporation if the person is not independent of the corporation, any of its affiliates, or the directors or officers of any such corporation or its affiliates.

• Marginal note:Independence

  (2) For the purposes of this section,

  • (a) independence is a question of fact; and

  • (b) a person is deemed not to be independent if they or their business partner

    • (i) is a business partner, a director, an officer or an employee of the corporation or any of its affiliates, or a business partner of any director, officer or employee of any such corporation or any of its affiliates,

    • (ii) beneficially owns or controls, directly or indirectly, a material interest in the securities of the corporation or any of its affiliates, or

    • (iii) has been a receiver, receiver-manager, sequestrator, liquidator or trustee in bankruptcy of the corporation or any of its affiliates within two years of the person’s proposed appointment as auditor of the corporation.

• Marginal note:Business partners

  (2.1) For the purposes of subsection (2), a person’s business partner includes a shareholder of that person.

• Marginal note:Duty to resign

  (3) An auditor who becomes disqualified under this section shall, subject to subsection (5), resign forthwith after becoming aware of the disqualification.

• Marginal note:Disqualification order

  (4) An interested person may apply to a court for an order declaring an auditor to be disqualified under this section and the office of auditor to be vacant.

• Marginal note:Exemption order

  (5) An interested person may apply to a court for an order exempting an auditor from disqualification under this section and the court may, if it is satisfied that an exemption would not unfairly prejudice the shareholders, make an exemption order on such terms as it thinks fit, which order may have retrospective effect.