Becoming a director of an Ontario or federal corporation is a two-stage legal process. The first is the valid election or appointment of the director, and second is the written consent to hold office.

Eligibility

Under section 118 of the Business Corporations Act (OBCA) and section 105 of the Canadian Business Corporations Act (CBCA), a director:

• must be an individual (as opposed to a corporation),
• must be at least eighteen years of age,
• must not be found to be incapable by a court in Canada or elsewhere, and
• must not hold the status of an undischarged bankrupt.

A corporation’s articles or by-laws may impose additional qualifications, such as a share-ownership requirement.

Election or appointment

Directors are typically elected by ordinary resolution of the shareholders at a meeting, or by written resolution when there is no ordinary resolution. Between shareholder meetings, the board may also appoint additional directors or fill a casual vacancy, according to the rules set out in the corporation’s articles and by-laws.

Written consent

The requirement that the individual must consent in writing before the election or appointment, or within ten days after, or have been present at the meeting without refusing to act, is found in section 119(9) of the OBCA and section 106(9) of the CBCA. An individual who is re-elected or re-appointed to serve consecutive terms is not ordinarily required to provide a new consent.

Notification of the Public Registry

An Ontario corporation is required to notify the government of any change in its directors through the Ontario Business Registry, as per the Corporations Information Act (Ontario). A federal corporation must file a corresponding notice with Corporations Canada under the CBCA.

Residency considerations

Directors of an Ontario corporation are not required to be a Canadian resident. It is required, however, that not less than twenty-five per cent of the directors of a federal corporation be resident Canadians, with a minimum of one such director where the board comprises fewer than four members.

Getting the legal help you need

Incorporating a business is stressful, but choosing the right board of directors can provide clarity, certainty, and peace of mind. The law dictates that the individual’s own written agreement is required as a condition of valid election or appointment. Get your Consent to Act as Director quickly and affordably with Legal Line Documents. Start now—it only takes a few minutes.

								
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