An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other Acts in consequence (S.C. 2001, c. 14)
Full Document:
Assented to 2001-06-14
38. (1) Subsection 106(1) of the Act is replaced by the following:
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:1994, c. 24, s. 11
(2) Subsections 106(7) and (8) of the Act are replaced by the following:
Marginal note:Vacancy among candidates
(7) If a meeting of shareholders fails to elect the number or the minimum number of directors required by the articles by reason of the lack of consent, disqualification, incapacity or death of any candidates, the directors elected at that meeting may exercise all the powers of the directors if the number of directors so elected constitutes a quorum.
Marginal note:Appointment of directors
(8) The directors may, if the articles of the corporation so provide, appoint one or more additional directors, who shall hold office for a term expiring not later than the close of the next annual meeting of shareholders, but the total number of directors so appointed may not exceed one third of the number of directors elected at the previous annual meeting of shareholders.
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.
39. Paragraphs 107(g) and (h) of the English version of the Act are replaced by the following:
(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.
40. Section 109 of the Act is amended by adding the following after subsection (3):
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 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.
41. Subsections 111(1) to (3) of the Act are replaced by the following:
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.
42. Subsection 113(1) of the Act is replaced by the following:
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.
43. (1) Subsections 114(3) and (4) of the Act are replaced by the following:
Marginal note:Canadian directors present at meetings
(3) Directors, other than directors of a corporation referred to in subsection 105(4), shall not transact business at a meeting of directors unless,
(a) if the corporation is subject to subsection 105(3), at least twenty-five per cent of the directors present are resident Canadians or, if the corporation has less than four directors, at least one of the directors present is a resident Canadian; or
(b) if the corporation is subject to subsection 105(3.1), a majority of directors present are resident Canadians or if the corporation has only two directors, at least one of the directors present is a resident Canadian.
Marginal note:Exception
(4) Despite subsection (3), directors may transact business at a meeting of directors where the number of resident Canadian directors, required under that subsection, is not present if
(a) a resident Canadian director who is unable to be present approves in writing, or by telephonic, electronic or other communication facility, the business transacted at the meeting; and
(b) the required number of resident Canadian directors would have been present had that director been present at the meeting.
(2) Subsection 114(9) of the Act is replaced by the following:
Marginal note:Participation
(9) Subject to the by-laws, a director may, in accordance with the regulations, if any, and if all the directors of the corporation consent, participate in a meeting of directors or of a committee of directors by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting. A director participating in such a meeting by such means is deemed for the purposes of this Act to be present at that meeting.
44. (1) Subsection 115(2) of the Act is repealed.
(2) Paragraphs 115(3)(b) and (c) of the Act are replaced by the following:
(b) fill a vacancy among the directors or in the office of auditor, or appoint additional directors;
(c) issue securities except as authorized by the directors;
(c.1) issue shares of a series under section 27 except as authorized by the directors;
(3) Paragraph 115(3)(f) of the Act is replaced by the following:
(f) pay a commission referred to in section 41 except as authorized by the directors;
45. Section 117 of the Act is amended by adding the following after subsection (2):
Marginal note:Evidence
(3) Unless a ballot is demanded, an entry in the minutes of a meeting to the effect that the chairperson of the meeting declared a resolution to be carried or defeated is, in the absence of evidence to the contrary, proof of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.
46. (1) Subsection 118(1) of the English version of the Act is replaced by the following:
Marginal note:Directors’ liability
118. (1) Directors of a corporation who vote for or consent to a resolution authorizing the issue of a share under section 25 for a consideration other than money are jointly and severally, or solidarily, liable to the corporation to make good any amount by which the consideration received is less than the fair equivalent of the money that the corporation would have received if the share had been issued for money on the date of the resolution.
(2) Subsection 118(2) of the Act is replaced by the following:
Marginal note:Further directors’ liabilities
(2) 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 amounts so distributed or paid and not otherwise recovered by the corporation:
(a) a purchase, redemption or other acquisition of shares contrary to section 34, 35 or 36;
(b) a commission contrary to section 41;
(c) a payment of a dividend contrary to section 42;
(d) a payment of an indemnity contrary to section 124; or
(e) a payment to a shareholder contrary to section 190 or 241.
(3) Subsection 118(4) of the Act is replaced by the following:
Marginal note:Recovery
(4) A director liable under subsection (2) is entitled to apply to a court for an order compelling a shareholder or other recipient to pay or deliver to the director any money or property that was paid or distributed to the shareholder or other recipient contrary to section 34, 35, 36, 41, 42, 124, 190 or 241.
(4) Paragraph 118(5)(a) of the Act is replaced by the following:
(a) order a shareholder or other recipient to pay or deliver to a director any money or property that was paid or distributed to the shareholder or other recipient contrary to section 34, 35, 36, 41, 42, 124, 190 or 241;
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