It is critical to obtain legal advice to determine exactly which corporate governance rules apply to your business, because non-compliance can be costly. The first step in determining the corporate governance requirements that apply to an entity is to determine the form of organization of the business. For example, if the entity is a corporation governed by the Ontario Business Corporations Act (“OBCA”) or the Canada Business Corporations Act (“CBCA”), then the OBCA or CBCA and the related charter documents apply. If the entity is a not-for-profit corporation incorporated in Ontario, it will be governed by Ontario’s Corporations Act and the related charter documents. If the entity is a not-for-profit corporation incorporated federally, it will be governed by the Canada Not-for-profit Corporations Act and the related charter documents. If the entity is a partnership, the agreement governing the partnership and the relevant legislation apply. If the entity is a trust, the declaration of trust governing the trust applies.
For example, the directors of a corporation incorporated under the Ontario Business Corporations Act (“OBCA”) must call an annual meeting of shareholders not later than 18 months after the corporation comes into existence and subsequently not later than 15 months after holding the last preceding annual meeting. They may call a special meeting of shareholders at any time. Unless the articles or the by-laws provide otherwise, a meeting of the shareholders may be held by telephone or electronic means. Additionally, the OBCA provides that in place of a meeting, a resolution in writing signed by all entitled to vote at a meeting can satisfy all the requirements of the OBCA related to a meeting of shareholders.