R.S.C., 1985, c. C-44

An Act respecting Canadian business corporations

Short Title

Short title

1 This Act may be cited as the Canada Business Corporations Act.

R.S., 1985, c. C-44, s. 1; 1994, c. 24, s. 1(F).

PART I

Interpretation and Application

Interpretation

Definitions

2 (1) In this Act,

affairs means the relationships among a corporation, its affiliates and the shareholders, directors and officers of such bodies corporate but does not include the business carried on by such bodies corporate; (affaires internes)

affiliate means an affiliated body corporate within the meaning of subsection (2); (groupe)

articles means the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of continuance, articles of reorganization, articles of arrangement, articles of dissolution, articles of revival and includes any amendments thereto; (statuts)

associate, in respect of a relationship with a person, means

(a) a body corporate of which that person beneficially owns or controls, directly or indirectly, shares or securities currently convertible into shares carrying more than ten per cent of the voting rights under all circumstances or by reason of the occurrence of an event that

has occurred and is continuing, or a currently exercisable option or right to purchase such shares or such convertible securities,

(b) a partner of that person acting on behalf of the partnership of which they are partners,

(c) a trust or estate or succession in which that person has a substantial beneficial interest or in respect of which that person serves as a trustee or liquidator of the succession or in a similar capacity,

(d) a spouse of that person or an individual who is cohabiting with that person in a conjugal relationship, having so cohabited for a period of at least one year,

(e) a child of that person or of the spouse or individual referred to in paragraph (d), and

(f) a relative of that person or of the spouse or individual referred to in paragraph (d), if that relative has the same residence as that person; (liens)

auditor includes a partnership of auditors or an auditor that is incorporated; (vérificateur)

beneficial interest means an interest arising out of the beneficial ownership of securities; (véritable propriétaire et propriété effective)

beneficial ownership includes ownership through any trustee, legal representative, agent or mandatary, or other intermediary; (véritable propriétaire et propriété effective)

body corporate includes a company or other body corporate wherever or however incorporated; (personne morale)

call means an option transferable by delivery to demand delivery of a specified number or amount of securities at a fixed price within a specified time but does not include an option or right to acquire securities of the corporation that granted the option or right to acquire; (option d’achat)

corporation means a body corporate incorporated or continued under this Act and not discontinued under this Act; (société par actions ou société)

court means

(a) in the Province of Newfoundland and Labrador, the Trial Division of the Supreme Court of the Province,

(a.1) in the Province of Ontario, the Superior Court of Justice,

(b) in the Provinces of Nova Scotia, British Columbia and Prince Edward Island, the Supreme Court of the Province,

(c) in the Provinces of Manitoba, Saskatchewan, Alberta and New Brunswick, the Court of Queen’s Bench for the Province,

(d) in the Province of Quebec, the Superior Court of the Province, and

(e) the Supreme Court of Yukon, the Supreme Court of the Northwest Territories and the Nunavut Court of Justice; (tribunal)

court of appeal means the court to which an appeal lies from an order of a court; (Cour d’appel)

debt obligation means a bond, debenture, note or other evidence of indebtedness or guarantee of a corporation, whether secured or unsecured; (titre de créance)

Director means the Director appointed under section 260; (directeur)

director means a person occupying the position of director by whatever name called and directors and board of directors includes a single director; (administrateur et conseil d’administration)

distributing corporation means, subject to subsections (6) and (7), a distributing corporation as defined in the regulations; (société ayant fait appel au public)

entity means a body corporate, a partnership, a trust, a joint venture or an unincorporated association or organization; (entité)

going-private transaction means a going-private transaction as defined in the regulations; (opération de fermeture)

incapable, in respect of an individual, means that the individual is found, under the laws of a province, to be unable, other than by reason of minority, to manage their property or is declared to be incapable by any court in a jurisdiction outside Canada; (incapable)

incorporator means a person who signs articles of incorporation; (fondateur)

individual means a natural person; (particulier)

liability includes a debt of a corporation arising under section 40, subsection 190(25) and paragraphs 241(3)(f) and (g); (passif)

mandatary, in Quebec, includes a successor; (mandataire)

Minister means such member of the Queen’s Privy Council for Canada as is designated by the Governor in Council as the Minister for the purposes of this Act; (ministre)

officer means an individual appointed as an officer under section 121, the chairperson of the board of directors, the president, a vice-president, the secretary, the treasurer, the comptroller, the general counsel, the general manager, a managing director, of a corporation, or any other individual who performs functions for a corporation similar to those normally performed by an individual occupying any of those offices; (dirigeant)

ordinary resolution means a resolution passed by a majority of the votes cast by the shareholders who voted in respect of that resolution; (résolution ordinaire)

person means an individual, partnership, association, body corporate, or personal representative; (personne)

personal representative means a person who stands in place of and represents another person including, but not limited to, a trustee, an executor, an administrator, a liquidator of a succession, an administrator of the property of others, a guardian or tutor, a curator, a receiver or sequestrator, an agent or mandatary or an attorney; (représentant personnel)

prescribed means prescribed by the regulations; (prescrit ou réglementaire)

prior legislation means the various Acts of Parliament that were in force prior to the coming into force of this Act and that applied to the incorporation of federal companies under those Acts, other than any financial institution as defined in section 2 of the Bank Act; (législation antérieure)

put means an option transferable by delivery to deliver a specified number or amount of securities at a fixed price within a specified time; (option de vente)

redeemable share means a share issued by a corporation

(a) that the corporation may purchase or redeem on the demand of the corporation, or

(b) that the corporation is required by its articles to purchase or redeem at a specified time or on the demand of a shareholder; (action rachetable)

resident Canadian means an individual who is

(b) a Canadian citizen not ordinarily resident in Canada who is a member of a prescribed class of persons, or

(c) a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act and ordinarily resident in Canada, except a permanent resident who has been ordinarily resident in Canada for more than one year after the time at which he or she first became eligible to apply for Canadian citizenship; (résident canadien)

security means a share of any class or series of shares or a debt obligation of a corporation and includes a certificate evidencing such a share or debt obligation; (valeur mobilière)

security interest means an interest or right in or charge on property of a corporation to secure payment of a debt or performance of any other obligation of the corporation; (sûreté)

send includes deliver; (envoyer)

series, in relation to shares, means a division of a class of shares; (série)

special resolution means a resolution passed by a majority of not less than two-thirds of the votes cast by the shareholders who voted in respect of that resolution or signed by all the shareholders entitled to vote on that resolution; (résolution spéciale)

squeeze-out transaction means a transaction by a corporation that is not a distributing corporation that would require an amendment to its articles and would, directly or indirectly, result in the interest of a holder of shares of a class of the corporation being terminated without the consent of the holder, and without substituting an interest of equivalent value in shares issued by the corporation, which shares have equal or greater rights and privileges than the shares of the affected class; (opération d’éviction)

unanimous shareholder agreement means an agreement described in subsection 146(1) or a declaration of a shareholder described in subsection 146(2). (convention unanime des actionnaires)

Affiliated bodies corporate 

(a) one body corporate is affiliated with another body corporate if one of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person; and

(b) if two bodies corporate are affiliated with the same body corporate at the same time, they are deemed to be affiliated with each other.

Control 

(3) For the purposes of this Act, a body corporate is controlled by a person or by two or more bodies corporate if

(a) securities of the body corporate to which are attached more than fifty per cent of the votes that may be cast to elect directors of the body corporate are held, other than by way of security only, by or for the benefit of that person or by or for the benefit of those bodies corporate; and

(b) the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate.

Holding body corporate 

(4) A body corporate is the holding body corporate of another if that other body corporate is its subsidiary.

Subsidiary body corporate 

(5) A body corporate is a subsidiary of another body corporate if

(ii)  that other body corporate and one or more bodies corporate each of which is controlled by that other body corporate, or

(iii) two or more bodies corporate each of which is controlled by that other body corporate; or

(b) it is a subsidiary of a body corporate that is a subsidiary of that other body corporate.

Exemptions — on application by corporation

(6) On the application of a corporation, the Director may determine that the corporation is not or was not a distributing corporation if the Director is satisfied that the determination would not be prejudicial to the public interest.

Exemptions — classes of corporations

(7) The Director may determine that a class of corporations are not or were not distributing corporations if the Director is satisfied that the determination would not be prejudicial to the public interest.

Infants 

(8) For the purposes of this Act, the word infant has the same meaning as in the applicable provincial law and, in the absence of any such law, has the same meaning as the word child in the United Nations Convention on the Rights of the Child, adopted in the United Nations General Assembly on November 20, 1989. 

R.S., 1985, c. C-44, s. 2; R.S., 1985, c. 27 (2nd Supp.), s. 10; 1990, c. 17, s. 6; 1992, c. 51, s. 30; 1994, c. 24, s. 2; 1998, c. 30, ss. 13(F), 15(E); 1999, c. 3, s. 16; 2000, c. 12, s. 27; 2001, c. 14, ss. 1, 135(E), c. 27, s. 209; 2002, c. 7, s. 88(E); 2011, c. 21, s. 13; 2015, c. 3, s. 12; 2018, c. 8, s. 1.

Individual with significant control 

2.1 (1) For the purposes of this Act, any of the following individuals is an individual with significant control over a corporation:

(a) an individual who has any of the following interests or rights, or any combination of them, in respect of a significant number of shares of the corporation:

(iii) the individual has direct or indirect control or direction over them;

(b) an individual who has any direct or indirect influence that, if exercised, would result in control in fact of the corporation; or

(c) an individual to whom prescribed circumstances apply.

Joint ownership or control 

(2) Two or more individuals are each considered to be an individual with significant control over a corporation if, in respect of a significant number of shares of the corporation,

(a) an interest or right, or a combination of interests or rights, referred to in paragraph (1)(a) is held jointly by those individuals; or

(b) a right, or combination of rights, referred to in paragraph (1)(a) is subject to any agreement or arrangement under which the right or rights are to be exercised jointly or in concert by those individuals.

Significant number of shares 

(3) For the purposes of this section, a significant number of shares of a corporation is

(a) any number of shares that carry 25% or more of the voting rights attached to all of the corporation’s outstanding voting shares; or

(b) any number of shares that is equal to 25% or more of all of the corporation’s outstanding shares measured by fair market value. 

2018, c. 27, s. 182.

Application

Application of Act 

3 (1) This Act applies to every corporation incorporated and every body corporate continued as a corporation under this Act that has not been discontinued under this Act.

(2) [Repealed, 1991, c. 45, s. 551]

Certain Acts do not apply 

(3) The following do not apply to a corporation:

(a) [Repealed, 2009, c. 23, s. 344]

(a.1) the Canada Not-for-profit Corporations Act;

(c) the provisions of a Special Act, as defined in section 87 of the Canada Transportation Act, that are in-consistent with this Act.

Limitations on business that may be carried on 

(a.1) an association to which the Cooperative Credit Associations Act applies;

(b) a company or society to which the Insurance Companies Act applies; or

(c) a company to which the Trust and Loan Companies Act applies.

Limitations on business that may be carried on 

(5) No corporation shall carry on business as a degree-granting educational institution unless expressly

authorized to do so by a federal or provincial agent that by law has the power to confer degree-granting authority on an educational institution. 

R.S., 1985, c. C-44, s. 3; 1991, c. 45, s. 551, c. 46, s. 595, c. 47, s. 719; 1992, c. 1, s. 142; 1994, c. 24, s. 3; 1996, c. 6, s. 167, c. 10, s. 212; 1999, c. 31, s. 63; 2001, c. 14, s. 2(F); 2007, c. 6, s. 399; 2009, c. 23, ss. 309, 344.

Purposes of Act

Purposes

4 The purposes of this Act are to revise and reform the law applicable to business corporations incorporated to carry on business throughout Canada, to advance the cause of uniformity of business corporation law in Canada and to provide a means of allowing an orderly transferance of certain federal companies incorporated under various Acts of Parliament to this Act. 

1974-75-76, c. 33, s. 4; 1978-79, c. 9, s. 1(F).

PART II

Incorporation

Incorporators 

5 (1) One or more individuals or bodies corporate may incorporate a corporation by signing articles of incorporation and complying with section 7.

Individuals 

(2) An individual may incorporate a corporation only if that individual

R.S., 1985, c. C-44, s. 5; 2018, c. 8, s. 2.

Articles of incorporation 

6 (1) Articles of incorporation shall follow the form that the Director fixes and shall set out, in respect of the proposed corporation,

(a) the name of the corporation;

(b) the province in Canada where the registered office is to be situated;

(c) the classes and any maximum number of shares that the corporation is authorized to issue, and

(i) if there will be two or more classes of shares, the rights, privileges, restrictions and conditions attaching to each class of shares, and

(ii) if a class of shares may be issued in series, the authority given to the directors to fix the number of shares in, and to determine the designation of, and the rights, privileges, restrictions and conditions attaching to, the shares of each series;

(d)  if the issue, transfer or ownership of shares of the corporation is to be restricted, a statement to that effect and a statement as to the nature of such restrictions;

(e) the number of directors or, subject to paragraph 107(a), the minimum and maximum number of directors of the corporation; and

(f) any restrictions on the businesses that the corporation may carry on.

Additional provisions in articles 

(2) The articles may set out any provisions permitted by this Act or by law to be set out in the by-laws of the corporation.

Special majorities 

(3) Subject to subsection (4), if the articles or a unanimous shareholder agreement require a greater number of votes of directors or shareholders than that required by this Act to effect any action, the provisions of the articles or of the unanimous shareholder agreement prevail.

Idem 

(4) The articles may not require a greater number of votes of shareholders to remove a director than the number required by section 109. 

R.S., 1985, c. C-44, s. 6; 1994, c. 24, s. 4(F); 2001, c. 14, ss. 3, 134(F).

Delivery of articles of incorporation 

7 An incorporator shall send to the Director articles of incorporation and the documents required by sections 19 and 106. 

1974-75-76, c. 33, s. 7; 1978-79, c. 9, s. 1(F).

Certificate of incorporation 

8 (1) Subject to subsection (2), on receipt of articles of incorporation, the Director shall issue a certificate of incorporation in accordance with section 262.

Exception — failure to comply with Act

(2) The Director may refuse to issue the certificate if a notice that is required to be sent under subsection 19(2)

or 106(1) indicates that the corporation, if it came into existence, would not be in compliance with this Act. 

R.S., 1985, c. C-44, s. 8; 2001, c. 14, s. 4.

Effect of certificate 

9 A corporation comes into existence on the date shown in the certificate of incorporation. 

1974-75-76, c. 33, s. 9; 1978-79, c. 9, s. 1(F).

Name of corporation 

10 (1) The word or expression “Limited”, “Limitée”, “Incorporated”, “Incorporée”, “Corporation” or “Société par actions de régime fédéral” or the corresponding abbreviation “Ltd.”, “Ltée”, “Inc.”, “Corp.” or “S.A.R.F.” shall be part, other than only in a figurative or descriptive sense, of the name of every corporation, but a corporation may use and be legally designated by either the full or the corresponding abbreviated form.

Saving for “S.C.C.” 

(1.1) Subsection (1) does not apply to a corporation that has a corporate name that, immediately before the day on which this subsection comes into force, included, other than only in a figurative or descriptive sense, the expression “Société commerciale canadienne” or the abbreviation “S.C.C.”, and any such corporation may use and be legally designated by either that expression or that abbreviation.

Exemption 

(2) The Director may exempt a body corporate continued as a corporation under this Act from the provisions of subsection (1).

Alternate name 

(3) Subject to subsection 12(1), the name of a corporation may be set out in its articles in an English form, a French form, an English form and a French form, or a combined English and French form, so long as the combined form meets the prescribed criteria. The corporation may use and may be legally designated by any such form.

Alternative name outside Canada 

(4) Subject to subsection 12(1), a corporation may, for use outside Canada, set out its name in its articles in any language form and it may use and may be legally designated by any such form outside Canada.