Ontario business corporations act pdf

Auditors Resignation of auditor Disqualification as auditor Examination by auditor Information to be laid before annual meeting Preparation of financial statements Filing by offering corporation Financial statements of subsidiaries Audit committee Approval by directors Investigation Matters that may be covered by court order Powers of inspector Rights at hearing Privileged statements Solicitor-client privilege Amendments Proposal to amend articles Authorization for variation of rights of special shareholders Articles of amendment Certificate of amendment Restated articles of incorporation Amalgamation Amalgamation agreement Submission of amalgamation agreement Amalgamations involving holding corporation Articles of amalgamation Effect of certificate Articles of continuance Transfer of Ontario corporations Arrangement Articles of arrangement sent to Director Borrowing powers Rights of dissenting shareholders Application and definitions Take-over or issuer bid Where corporation required to acquire securities Definition Application of ss.

Voluntary winding up Inspectors Vacancy in office of liquidator Removal of liquidator Commencement of winding up Corporation to cease business No proceedings against corporation after voluntary winding up except by leave List of contributories and calls Meetings of corporation during winding up Arrangements with creditors Power to compromise with debtors and contributories Account of voluntary winding up to be made by liquidator to a meeting Winding up by court Who may apply Power of court Appointment of liquidator Costs and expenses Proceedings in winding up after order Orders following winding-up order Proceedings against corporation after court winding up Provision for discharge and distribution by the court Order for dissolution Where no liquidator Consequences of winding up Payment of costs and expenses Powers of liquidators Acts by more than one liquidator Nature of liability of contributory Deposit of money Proving claim Application for direction Examination of persons as to estate Proceedings by shareholders Rights conferred by Act to be in addition to other powers Stay of winding up proceedings Where creditor unknown Where shareholder unknown Disposal of records, etc.

Voluntary dissolution Articles of dissolution where corporation active Certificate of dissolution Cancellation of certificate, etc. Notice of dissolution by order Proceedings after dissolution Liability of shareholders to creditors Derivative actions Court order Oppression remedy Discontinuance and settlement Rectifying error in entering, etc. Notice of refusal to file Appeal from Director Orders for compliance Application made without notice Appeal Offences Consent Offence Limitation Information containing more than one offence Notice to directors or shareholders Notice to corporation Waiver of notice and abridgement of times Certificate that may be signed by directors, etc.

Accepting copy of notice or other document Proof by affidavit Examination, etc. Appeal from Commission Non-application of ss. Effect of registration Representatives, etc. Corporation has no duty to enforce performance 4 A corporation is not required to inquire into the existence of, or see to the performance or observance of, any duty owed to a third person by a registered holder of any of its securities or by anyone whom it treats, as permitted or required by this section, as the owner or registered holder thereof.

Repudiation by minor 5 If a minor exercises any rights of ownership in the securities of a corporation, no subsequent repudiation or avoidance is effective against the corporation. Joint holders 6 Where a security is issued to several persons as joint holders, upon satisfactory proof of the death of one joint holder, the corporation may treat the surviving joint holders as owner of the security. Registration of executor, etc. Recording in security register 9 Deposit of the documents required by subsection 7 or 8 empowers a corporation or its transfer agent to record in a securities register the transmission of a security from the deceased holder to a person referred to in clause 2 a or to such person as that person may designate and, thereafter, to treat the person who thus becomes a registered holder as the owner of those securities.

Shares subject to call 2 The provisions of the Corporations Act relating to the liability of a holder of shares that are not fully paid and to the enforcement of such liability apply in respect of shares that were not fully paid, a on the 1st day of January, , in the case of shares of a corporation that then became subject to The Business Corporations Act , being chapter 53 of the Revised Statutes of Ontario, ; or b on the day upon which any other body corporate was continued under The Business Corporations Act , being chapter 53 of the Revised Statutes of Ontario, , or under this Act, in the case of shares of such other body corporate.

Place of meetings Meeting by electronic means 2 A meeting held under subsection 94 2 shall be deemed to be held at the place where the registered office of the corporation is located. Meeting by electronic means 2 Unless the articles or the by-laws provide otherwise, a meeting of the shareholders may be held by telephonic or electronic means and a shareholder who, through those means, votes at the meeting or establishes a communications link to the meeting shall be deemed for the purposes of this Act to be present at the meeting.

Date for determining shareholders Same 2 For the purpose of determining shareholders entitled to receive notice of a meeting of shareholders, the directors may fix in advance a date as the record date for such determination of shareholders, but the record date shall not precede by more than 60 days or by less than 30 days the date on which the meeting is to be held.

Notice of date 4 If a record date is fixed, unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice thereof shall be given, not less than seven days before the date so fixed, a by advertisement in a newspaper published or distributed in the place where the corporation has its registered office and in each place in Canada where it has a transfer agent or where a transfer of its shares may be recorded; and b by written notice to each stock exchange in Canada on which the shares of the corporation are listed for trading.

Idem 2 A notice of a meeting is not required to be sent to shareholders who were not registered on the records of the corporation or its transfer agent on the record date determined under subsection 95 2 or 3 , but failure to receive a notice does not deprive a shareholder of the right to vote at the meeting.

Idem 3 If a meeting of shareholders is adjourned for less than thirty days, it is not necessary, unless the by-laws otherwise provide, to give notice of the adjourned meeting other than by announcement at the earliest meeting that is adjourned. Idem 4 If a meeting of shareholders is adjourned by one or more adjournments for an aggregate of thirty days or more, notice of the adjourned meeting shall be given as for an original meeting but, unless the meeting is adjourned by one or more adjournments for an aggregate of more than ninety days, section does not apply.

Idem 6 Notice of a meeting of shareholders at which special business is to be transacted shall state or be accompanied by a statement of, a the nature of that business in sufficient detail to permit the shareholder to form a reasoned judgment thereon; and b the text of any special resolution or by-law to be submitted to the meeting.

Subject to this Act or the articles or by-laws of a corporation or a unanimous shareholder agreement, a all questions proposed for the consideration of the shareholders shall be determined by the majority of the votes cast and the chair presiding at the meeting shall not have a second or casting vote in case of an equality of votes; b the chair presiding at a meeting of shareholders may, with the consent of the meeting and subject to such conditions as the meeting decides, adjourn the meeting from time to time and from place to place subject to subsections 96 3 and 4 ; and c the president or, in his or her absence, a vice-president who is a director shall preside as chair at a meeting of shareholders, but, if there is no president or such a vice-president or if at a meeting none of them is present within fifteen minutes after the time appointed for the holding of the meeting, the shareholders present shall choose a person from their number to be the chair.

Waiving notice Proposal Note: On a day to be named by proclamation of the Lieutenant Governor, section 99 is amended by adding the following subsections: Proof of status 1. Circulating proposal 2 Where a corporation receives notice of a proposal and the corporation solicits proxies, it shall set out the proposal in the management information circular required by section or attach the proposal thereto.

Statement in support of proposal 3 If so requested by the person who submits notice of a proposal, the corporation shall include in the management information circular or attach to it a statement in support of the proposal by the person and the name and address of the person.

Same 3. Proposal may include nominations 4 A proposal may include nominations for the election of directors if the proposal is signed by one or more holders of shares representing in the aggregate not less than 5 per cent of the shares or 5 per cent of the shares of a class or series of shares of the corporation entitled to vote at the meeting to which the proposal is to be presented, but this subsection does not preclude nominations being made at a meeting of shareholders.

Where subss. Where no liability 6 No corporation or person acting on its behalf incurs any liability by reason only of circulating a proposal or statement in compliance with this section. Notice of refusal 7 If a corporation refuses to include a proposal in a management information circular, the corporation shall, within 10 days after receiving the proposal, send notice to the person submitting the proposal of its intention to omit the proposal from the management information circular and send to the person a statement of the reasons for the refusal.

Idem 9 The corporation or any person aggrieved by a proposal may apply to the court for an order permitting the corporation to omit the proposal from the management information circular, and the court, if it is satisfied that subsection 5 applies, may make such order as it thinks fit.

Idem 10 An applicant under subsection 8 or 9 shall give the Director notice of the application and the Director is entitled to appear and be heard in person or by counsel. List of shareholders Examination of list 4 A shareholder may examine the list of shareholders, a during usual business hours at the registered office of the corporation or at the place where its central securities register is maintained; and b at the meeting of shareholders for which the list was prepared.

Quorum Idem 2 If a quorum is present at the opening of a meeting of shareholders, the shareholders present may, unless the by-laws otherwise provide, proceed with the business of the meeting even if a quorum is not present throughout the meeting. Idem 3 If a quorum is not present at the time appointed for a meeting of shareholders, or within such reasonable time thereafter as the shareholders present may determine, the shareholders present may adjourn the meeting to a fixed time and place but may not transact any other business.

Where only one shareholder 4 If a corporation has only one shareholder, or only one holder of any class or series of shares, the shareholder present in person or by proxy constitutes a meeting.

Voting rights Representative 2 Where a body corporate or association is a shareholder of a corporation, the corporation shall recognize any individual authorized by a resolution of the directors or governing body of the body corporate or association to represent it at meetings of shareholders of the corporation.

Idem 3 An individual authorized as set out in subsection 2 may exercise on behalf of the body corporate or association he or she represents all the powers it could exercise if it were an individual shareholder. Joint shareholders 4 Unless the by-laws otherwise provide, where two or more persons hold shares jointly, one of those holders present at a meeting of shareholders may in the absence of the others vote the shares, but if two or more of those persons are present, in person or by proxy, they shall vote as one on the shares jointly held by them.

Manner of voting Idem 2 A shareholder or proxyholder may demand a ballot either before or after any vote by show of hands. Entry in minutes 3 Unless a ballot is demanded, an entry in the minutes of a meeting of shareholders to the effect that the chair declared a motion to be carried is admissible in evidence as proof of the fact, in the absence of evidence to the contrary, without proof of the number or proportion of the votes recorded in favour of or against the motion.

Resolution in lieu of meeting Copy of resolution kept with minutes 2 A copy of every resolution referred to in subsection 1 shall be kept with the minutes of the meetings of shareholders.

Requisition for shareholders meeting Idem 2 The requisition referred to in subsection 1 shall state the business to be transacted at the meeting and shall be sent to the registered office of the corporation. Duty of directors to call meeting 3 Upon receiving the requisition referred to in subsection 1 , the directors shall call a meeting of shareholders to transact the business stated in the requisition unless, a a record date has been fixed under subsection 95 2 and notice thereof has been given under subsection 95 4 ; b the directors have called a meeting of shareholders and have given notice thereof under section 96; or c the business of the meeting as stated in the requisition includes matters described in clauses 99 5 b to d.

Where requisitionist may call meeting 4 Subject to subsection 3 , if the directors do not within twenty-one days after receiving the requisition referred to in subsection 1 call a meeting, any shareholder who signed the requisition may call the meeting. Calling of meeting 5 A meeting called under this section shall be called as nearly as possible in the manner in which meetings are to be called under the by-laws, this Part and Part VIII.

Repayment of expenses 6 The corporation shall reimburse the shareholders for the expenses reasonably incurred by them in requisitioning, calling and holding the meeting unless the shareholders have not acted in good faith and in the interest of the shareholders of the corporation generally.

Requisition by court Power of court 2 Without restricting the generality of subsection 1 , the court may order that the quorum required by the by-laws, the articles or this Act be varied or dispensed with at a meeting called, held and conducted under this section.

Effect of meeting 3 A meeting called, held and conducted under this section is for all purposes a meeting of shareholders of the corporation duly called, held and conducted. Determination of controversy Court order 2 Upon an application under this section, the court may make any order it thinks fit including, without limiting the generality of the foregoing, a an order restraining a director or auditor whose election or appointment is challenged from acting pending determination of the dispute; b an order declaring the result of the disputed election or appointment; c an order requiring a new election or appointment and including in the order directions for the management of the business and affairs of the corporation until a new election is held or appointment made; and d an order determining the voting rights of shareholders and of persons claiming to own shares.

Agreement between shareholders Idem 2 A written agreement among all the shareholders of a corporation or among all the shareholders and one or more persons who are not shareholders may restrict in whole or in part the powers of the directors to manage or supervise the management of the business and affairs of the corporation. Unanimous shareholder agreement 3 Where a person who is the registered holder of all the issued shares of a corporation makes a written declaration that restricts in whole or in part the powers of the directors to manage or supervise the management of the business and affairs of a corporation, the declaration shall be deemed to be a unanimous shareholder agreement.

Party to unanimous shareholder agreement 4 A transferee of shares subject to a unanimous shareholder agreement shall be deemed to be a party to the agreement. Where shareholder has power, etc. Unanimous shareholder agreement 5. Matter that a unanimous shareholder agreement may provide 6 A unanimous shareholder agreement may, without restricting the generality of subsection 2 , provide that, a any amendment of the unanimous shareholder agreement may be effected in the manner specified therein; and b in the event that shareholders who are parties to the unanimous shareholder agreement are unable to agree on or resolve any matter pertaining to the agreement, the matter may be referred to arbitration under such procedures and conditions as are specified in the unanimous shareholder agreement.

Issuance or shares subject to unanimous shareholder agreement 7 If a unanimous shareholder agreement is in effect at the time a share is issued by a corporation to a person other than an existing shareholder, a that person shall be deemed to be a party to the agreement whether or not that person had actual knowledge of it when the share was issued; b the issue of the share does not operate to terminate the agreement; and c if that person is a purchaser for value without notice of the agreement, that person may rescind the contract under which the shares were acquired by giving notice to that effect to the corporation within 60 days after the person actually receives a complete copy of the agreement.

Transfer of shares subject to unanimous shareholder agreement 8 If a unanimous shareholder agreement is in effect when a person who was not otherwise a party to the agreement acquires a share of the corporation, other than under subsection 1 , a the person who acquired the share shall be deemed to be a party to the agreement whether or not that person had actual knowledge of it when he or she acquired the share; and b neither the acquisition of the share nor the registration of that person as a shareholder operates to terminate the agreement.

Rights of transferee 10 If a person sends a notice of objection under subsection 9 , that person is entitled to, a rescind the contract under which the shares were acquired by giving notice to that effect to the corporation and the transferor within 60 days after the transferee actually receives a complete copy of the unanimous shareholder agreement; or b demand that the transferor pay the transferee the fair value of the shares held by the transferee, determined as of the close of business on the day on which the transferor delivers the notice of objection to the corporation, in which case subsections 4 , 18 and 19 apply, with the necessary modifications, as if the transferor were the corporation.

Proxies Signature 2 Subject to subsection 4. Expiry 2. Form of proxy 3 Every form of proxy shall comply with the regulations. Revocation 4 A shareholder may revoke a proxy, a by depositing an instrument in writing that complies with subsection 4. Time of revocation 4.

Electronic signature 4. Time limit for deposit 5 The directors may by resolution fix a time not exceeding forty-eight hours, excluding Saturdays and holidays, preceding any meeting or adjourned meeting of shareholders before which time proxies to be used at that meeting must be deposited with the corporation or an agent thereof, and any period of time so fixed shall be specified in the notice calling the meeting. Mandatory solicitation of proxy Information circular Exception 1.

Exemption order re ss. Proxyholder Rights of proxyholder 2 A proxyholder or an alternate proxyholder has the same rights as the shareholder who appointed him or her to speak at a meeting of shareholders in respect of any matter, to vote by way of ballot at the meeting and, except where a proxyholder or an alternate proxyholder has conflicting instructions from more than one shareholder, to vote at such a meeting in respect of any matter by way of a show of hands.

Vote 3 Despite subsections 1 and 2 , where the chair of a meeting of shareholders declares to the meeting that, to the best of his or her belief, if a ballot is conducted, the total number of votes attached to the shares represented at the meeting by proxy required to be voted against what will be the decision of the meeting in relation to any matter or group of matters is less than 5 per cent of all the votes that might be cast at the meeting on such ballot, and where a shareholder, proxyholder or alternate proxyholder does not demand a ballot, a the chair may conduct the vote in respect of that matter or group of matters by a show of hands; and b a proxyholder or alternate proxyholder may vote in respect of that matter or group of matters by a show of hands.

Board of directors 2 A corporation shall have a board of directors which shall consist of, a in the case of a corporation that is not an offering corporation, at least one individual; and b in the case of a corporation that is an offering corporation, not fewer than three individuals. Idem 3 At least one-third of the directors of an offering corporation shall not be officers or employees of the corporation or any of its affiliates.

Deemed directors 4 Where all of the directors have resigned or have been removed by the shareholders without replacement, any person who manages or supervises the management of the business and affairs of the corporation shall be deemed to be a director for the purposes of this Act. By-laws by resolution Confirmation by shareholders 2 Where the directors make, amend or repeal a by-law under subsection 1 , they shall submit the by-law, amendment or repeal to the shareholders at the next meeting of shareholders, and the shareholders may confirm, reject or amend the by-law, amendment or repeal.

Effective date 3 Where a by-law is made, amended or repealed under subsection 1 , the by-law, amendment or repeal is effective from the date of the resolution of the directors until it is confirmed, confirmed as amended or rejected by the shareholders under subsection 2 or until it ceases to be effective under subsection 4 and, where the by-law is confirmed or confirmed as amended, it continues in effect in the form in which it was so confirmed.

Rejection, etc. By-law re shareholder proposal 5 If a shareholder proposal to make, amend or repeal a by-law is made in accordance with section 99 and is adopted by shareholders at a meeting, the by-law, amendment or repeal is effective from the date of its adoption and requires no further confirmation.

By-law need not be so described 6 A by-law need not be described as a by-law in a resolution referred to in this section. First directors meeting Resolution in writing 2 Any matter referred to in subsection 1 may be dealt with by the directors by a resolution in writing in accordance with subsection 1. Where subs. Calling meeting 4 An incorporator or a director may call the meeting of directors referred to in subsection 1 by giving not less than five days notice thereof to each director, stating the time and place of the meeting.

Qualifications of directors A person who is less than eighteen years of age. A person who is not an individual. Holding shares 2 Unless the articles otherwise provide, a director of a corporation is not required to hold shares issued by the corporation.

Residency 3 At least 25 per cent of the directors of a corporation other than a non-resident corporation shall be resident Canadians, but where a corporation has less than four directors, at least one director shall be a resident Canadian. First directors Resignation 2 Until the first meeting of shareholders, the resignation of a director named in the articles shall not be effective unless at the time the resignation is to become effective a successor has been elected or appointed.

Powers and duties 3 The first directors of a corporation named in the articles have all the powers and duties and are subject to all the liabilities of directors. Election of directors 4 Subject to clause a , shareholders of a corporation shall elect, at the first meeting of shareholders and at each succeeding annual meeting at which an election of directors is required, directors to hold office for a term expiring not later than the close of the third annual meeting of shareholders following the election.

Term for directors 5 It is not necessary that all directors elected at a meeting of shareholders hold office for the same term. Idem 6 A director not elected for an expressly stated term ceases to hold office at the close of the first annual meeting of shareholders following his or her election. Idem 7 Despite this section, if directors are not elected at a meeting of shareholders the incumbent directors continue in office until their successors are elected.

Failure to elect required number of directors 8 If a meeting of shareholders fails to elect the number of directors required by the articles or by section by reason of the disqualification, incapacity or death of one or more candidates, the directors elected at that meeting, if they constitute a quorum, may exercise all the powers of the directors of the corporation pending the holding of a meeting of shareholders in accordance with subsection 3.

Consent required 9 Subject to subsection 10 , the election or appointment of a director under this Act is not effective unless the person elected or appointed consents in writing before or within 10 days after the date of the election or appointment. Later consent 10 If the person elected or appointed consents in writing after the time period mentioned in subsection 9 , the election or appointment is valid.

Cumulative voting for directors When director ceases to hold office Idem 2 A resignation of a director becomes effective at the time a written resignation is received by the corporation or at the time specified in the resignation, whichever is later.

Removal of directors Idem 2 Where the holders of any class or series of shares of a corporation have an exclusive right to elect one or more directors, a director so elected may only be removed by an ordinary resolution at a meeting of the shareholders of that class or series.

Idem 3 Subject to clauses a to d , a vacancy created by the removal of a director may be filled at the meeting of the shareholders at which the director is removed or, if not so filled, may be filled under section Entitlement of director Distribution of statement 3 Upon receiving a statement under subsection 2 , a corporation shall forthwith send a copy of the statement to every shareholder entitled to receive notice of meetings of shareholders unless the statement is included in or attached to a management information circular required by section Vacancies Appointment of directors subsequent to annual meeting 2 Where a special resolution passed under subsection 3 empowers the directors of a corporation the articles of which provide for a minimum and maximum number of directors to determine the number of directors, the directors may not, between meetings of shareholders, appoint an additional director if, after such appointment, the total number of directors would be greater than one and one-third times the number of directors required to have been elected at the last annual meeting of shareholders.

Election of directors to make quorum 3 If there is not a quorum of directors, or if there has been a failure to elect the number of directors required by the articles or by section , the directors then in office shall forthwith 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.

Where elected by class of shareholders 4 Where 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 5 , the remaining directors elected by that class or series may fill the vacancy except a vacancy resulting from an increase in the number of directors for that class or series or from a failure to elect the number of directors for that class or series; or b if there are no such remaining directors, any holder of shares of that class or series may call a meeting of the holders thereof for the purpose of filling the vacancy.

Idem, where no quorum 5 The articles may provide that a vacancy among the directors shall only be filled by a vote of the shareholders, or by a vote of the holders of any class or series of shares having an exclusive right to elect one or more directors if the vacancy occurs among the directors elected by that class or series.

Change in number of directors Articles amendment 2 Where a corporation has increased or decreased the number of directors by special by-law under a predecessor of this Act, the special by-law shall be deemed to constitute an amendment to its articles. Number of directors 3 Where a minimum and maximum number of directors of a corporation is provided for in its articles, the number of directors of the corporation and the number of directors to be elected at the annual meeting of the shareholders shall be such number as shall be determined from time to time by special resolution or, if the special resolution empowers the directors to determine the number, by resolution of the directors.

Idem 4 Where no resolution has been passed under subsection 3 , the number of directors of the corporation shall be the number of directors named in its articles. Place of meetings and quorum Exceptions 2 Where the by-laws of the corporation so provide, a meeting of the board of directors may be held at any place within or outside Ontario, but, except where the corporation is a non-resident corporation or the articles or the by-laws otherwise provide, in any financial year of the corporation a majority of the meetings of the board of directors shall be held at a place within Canada.

Quorum 3 Subject to the articles or by-laws and subsection 4 , a majority of the number of directors or minimum number of directors required by the articles constitutes a quorum at any meeting of directors, but in no case shall a quorum be less than two-fifths of the number of directors or minimum number of directors, as the case may be. Idem 4 Where a corporation has fewer than three directors, all directors must be present at any meeting of directors to constitute a quorum.

Idem 5 Subject to the articles or by-laws, where there is a vacancy or vacancies in the board of directors, the remaining directors may exercise all the powers of the board so long as a quorum of the board remains in office.

Calling meeting of directors 8 In addition to any other provision in the articles or by-laws of a corporation for calling meetings of directors, a quorum of the directors may, at any time, call a meeting of the directors for the transaction of any business the general nature of which is specified in the notice calling the meeting.

Waiver of notice 10 A director may in any manner and at any time waive a notice of a meeting of directors and attendance of a director at a meeting of directors is a waiver of notice of the meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

Adjourned meeting 11 Notice of an adjourned meeting of directors is not required to be given if the time and place of the adjourned meeting is announced at the original meeting. Where one director 12 Where a corporation has only one director, that director may constitute a meeting. Meeting by telephone, etc.

Place of meeting by telephone 14 If a majority of the directors participating in a meeting held under subsection 13 are then in Canada, the meeting shall be deemed to have been held in Canada.

Delegation by directors Validity of acts of directors and officers Resolutions in writing Copy to be kept 2 A copy of every resolution passed under subsection 1 shall be kept with the minutes of the proceedings of the directors or committee of directors.

Liability of directors Idem 2 Directors of a corporation who vote for or consent to a resolution authorizing, a Repealed: , c.

Joint liability 3 A director who has satisfied a judgment rendered under this section is entitled to contribution from the other directors who voted for or consented to the unlawful act upon which the judgment was founded. Application to court 4 A director liable under subsection 2 is entitled to apply to the 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 30, 31, 32, 37, 38, , or What court may order 5 In connection with an application under subsection 4 , the court may, if it is satisfied that it is equitable to do so, 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 30, 31, 32, 37, 38, , or ; b order a corporation to return or issue shares to a person from whom the corporation has purchased, redeemed or otherwise acquired shares; or c make any further order it thinks fit.

Limitation of liability 2 A director is liable under subsection 1 only if, a the corporation is sued in the action against the director and execution against the corporation is returned unsatisfied in whole or in part; or b before or after the action is commenced, the corporation goes into liquidation, is ordered to be wound up or makes an authorized assignment under the Bankruptcy and Insolvency Act Canada , or a receiving order under that Act is made against it, and, in any such case, the claim for the debt has been proved.

Idem 3 Where execution referred to in clause 2 b has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution. Rights of director who pays debt 4 Where a director pays a debt under subsection 1 that is proved in liquidation and dissolution or bankruptcy proceedings, the director is entitled to any preference that the employee would have been entitled to, and where a judgment has been obtained the director is entitled to an assignment of the judgment.

Idem 5 A director who has satisfied a claim under this section is entitled to contribution from the other directors who were liable for the claim.

Disclosure: conflict of interest Director not to vote 5 A director referred to in subsection 1 shall not attend any part of a meeting of directors during which the contract or transaction is discussed and shall not vote on any resolution to approve the contract or transaction unless the contract or transaction is, a one relating primarily to his or her remuneration as a director of the corporation or an affiliate; b one for indemnity or insurance under section ; or c one with an affiliate.

Remaining directors deemed quorum 5. Shareholder approval 5. Our staff can't provide legal advice, interpret the law or conduct research.

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