A Consent to Act as a Director is a signed document by which an individual formally agrees to accept the office of director of a corporation. Under both Ontario and federal corporate legislation, an individual does not become a director merely because a corporation designates that individual as such; the individual’s own written agreement is required before a valid appointment can be made.

What is required for consent?

• Where the first directors of a newly incorporated corporation are named in the Articles of Incorporation.
• Where shareholders elect a director at an annual or special meeting.
• Where the existing board appoints an individual to fill a vacancy or to serve as an additional director between shareholder meetings.

The statutory requirement in Ontario

Section 119(9) of the Ontario Business Corporations Act (OBCA) states that an election or appointment as director is valid only where the individual

• was present at the meeting and did not refuse to act, and
• consented in writing before the election or appointment or consented in writing within ten days after (if consent is given after the 10-day window, the appointment can still become effective given it happens eventually)

The Federal Canada Business Corporations Act requirement

For corporations governed by the Canada Business Corporations Act (CBCA), section 106(9) an individual elected or appointed as a director is officially a director if

• They were at the meeting where the election or appointment occurred and did not refuse the position; or
• They were not present at the meeting but they either:
  • consented in writing to hold office before the election/appointment or within 10 days after it, or
  • acted as a director under that election or appointment

What are the consequences of non-compliance?

If an appointment is made without consent it may not only be invalid, but the individual in question may not be entitled to the statutory protections given to properly appointed directors, and third parties relying on the corporation’s public filings may be misled as to who possesses authority to make decisions for the corporation.

Illustration

When a numbered Ontario corporation appoints an individual to fill a board vacancy on March 1, and that individual is not present at the meeting, the appointment is valid only if written consent is provided by March 11, ten days after the appointment. Where consent is provided after this period, the corporation should pass a further resolution and obtain written consent at that time.

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.

								
You now have 3 options:
								

									
More answers about Business & Corporate Law
									
Master List: 2,500 Legal Answers
																													
																		
Government Links