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Corporate Maintenance FAQ

 Maintaining your corporation doesn’t need to be complicated.
The FAQ below can answer the most common questions on corporate maintenace

What is a Director?

A director is an individual who manages and oversees the running of the business of the corporation and makes certain important decisions. A director sits on the board of directors with the other directors of the corporation if any.

How Many Directors Must a Corporation Have?

Every corporation must have at least one (1) director. There is no fixed maximum as to the number of directors that a private corporation must have at any given time. Nevertheless, the number of directors that a corporation decides to have must be indicated in its Articles of Incorporation by either specifying an exact number or a variable number (i.e., a minimum and a maximum) of directors.

Who is Eligible to become a Director?

As a general rule, only physical persons (i.e., individuals) are eligible to be directors of a corporation. Not all physical persons, though, can become directors. In fact, there are physical persons who are generally prohibited from becoming directors, namely:

  • persons under 18 years of age;
  • persons over 18 years of age who are under tutorship or guardianship or are otherwise incapacitated; and
  • in certain jurisdictions, undischarged bankrupts.

IIf a person elected as a director fails to meet the necessary eligibility requirements described above at any time during his/her mandate, his/her election may be considered null and he/she would no longer be deemed a director. On the other hand, past acts of this director cannot generally be annulled on the sole ground that he/she was disqualified as a director.

Unless the corporation’s Articles of Incorporation provide otherwise, a director is not required to be a shareholder of the corporation. In addition, certain jurisdictions require a director to be a Canadian resident – see below.

Jurisdiction Board of Directors 
Canadian Residency Requirement
Federal At least 25% of the directors must be Canadian residents
Alberta At least half of directors must be Canadian residents
British Columbia None
Manitoba Majority of directors must be Canadian residents
New Brunswick None
Newfoundland Majority of directors must be Canadian residents
Nova Scotia None
Ontario Majority of directors must be Canadian residents.
If there are only 2 directors, then only 1 must be Canadian resident
Prince Edward Island None
Quebec None
Saskatchewan Majority of directors must be Canadian residents and at least 1 director must be resident of Saskatchewan
How Do People Become Directors?

A corporation’s first directors are generally those named on the initial government filing that is sent to the government body or department along with the corporation’s Articles of Incorporation. These persons officially become the directors of the corporation as of the date mentioned on the corporation’s Articles of Incorporation and they remain in office until they are re-elected, replaced, removed or resign.

Subsequent directors, also referred to as the “permanent directors”, are elected by the shareholders. Unless there is a provision to the contrary in the corporation’s Articles of Incorporation or By-Laws, shareholders typically elect the directors on an annual basis. At this time, the shareholders either re-elect the present directors for another term or elect new directors. If they remain qualified, directors can usually be re-elected for an indefinite period of time. The election of directors can occur at any given time during the year, but in practice, the election almost always takes place during the annual shareholders’ meeting.

The election usually takes place by way of a ballot, unless there is a provision to the contrary in the corporation’s Articles of Incorporation or By-Laws. In most cases, the corporation’s By-Laws state that a ballot is only required if a shareholder present at the meeting to elect the directors makes a special request.


How Are Vacancies on the Board of Directors Filled?

In general, any vacancy in the board of directors is filled for the remainder of the term by the other directors from among qualified persons. A vacancy resulting from the removal of a director may generally be filled by the shareholders at the meeting at which the removal took place, otherwise, it can be done by the board of directors.

If an opening is created following an increase in the number of directors, this opening is usually only filled by the shareholders at a special general meeting. Since the position was never occupied in the past, it is not deemed to be vacant and, therefore, the other directors are not entitled to fill it. In theory, an incomplete board of directors may have no authority to act. Consequently, it is often recommended that any vacancies in the composition of the board of directors be filled as soon as possible.

How are Directors Removed from the Board of Directors?

As a general rule, shareholders have the exclusive right to remove a director. Unless there is a provision to the contrary in the Articles of Incorporation, shareholders can remove a director by resolution at a special general meeting. Only those shareholders who have the right to elect directors are typically entitled to remove a director at this special meeting.

The director who is to be removed must generally be informed of the place, date and time of the meeting within the prescribed delay. The director in question can attend the meeting and be heard or give reasons for his/her opposition to his/her removal in a written statement read by the chairman of the meeting. The vacancy created by the removal of a director can be filled at the meeting at which the removal took place or at a later date. In the former case, the notice of the calling of the meeting must then mention that an election is to be held in the event that the resolution concerning the removal is adopted.

Can a Director Resign?

A director can resign at any time as a director by giving notice to that effect. Unless there is a provision to the contrary in the corporation’s By-Laws, a director’s resignation can be oral (i.e., he/she can resign verbally during a board of directors’ meeting). Nevertheless, it is generally recommended that a corporation require a director’s resignation to be in written form for purposes of proof.

In the absence of a specific provision in the By-Laws of the corporation, a director’s resignation often takes effect immediately and does not require the approval of the corporation’s board of directors. Most corporations’ By-Laws, though, contain such a requirement.

A director who resigns but continues to act and present him/herself to third parties as a director of the corporation risks being considered a de facto director and, consequently, remains liable as a director.

How does a Director Vote?

Unlike shareholders, whose number of votes is based on the number and class of shares that they hold at a given time, directors usually have only one vote per person at board of directors’ meetings. Sometimes the chairman of the board of directors has a preponderate vote. Directors are not typically entitled to vote by proxy at a board of directors’ meeting.

Are Directors Paid?

Generally, unless there is a provision to the contrary in the corporation’s Articles of Incorporation, By-Laws or a unanimous shareholders’ agreement, the directors are entitled to fix their own remuneration. Directors cannot abuse this privilege by awarding themselves an excessive remuneration which is disproportionate with the services rendered; otherwise, the courts may intervene upon the petition of an interested party.

Directors’ remuneration can take one of several forms, including a fixed annual sum, a fixed amount for attending each meeting of the board of directors, or a specific number of shares in the corporation. A director can, in addition to being a director, act as an employee of the corporation and be remunerated for this function as well. In many small corporations, for example, a person is a director as well as an officer and employee of the corporation and, as such, can be remunerated for each job function he/she performs.

A corporation may be responsible for the defence of its director who is prosecuted by a third party for an act done in the exercise of his/her duties. The corporation may have to pay any damages resulting from that act unless the director committed a grievous offence or a personal offence, separate from his/her duties as director.

If the proceeding against a director is of a penal or criminal nature, the corporation is generally only responsible to pay the director’s expenses if he/she had reasonable grounds to believe that his/her conduct was in accordance with the law or if he/she has been freed or acquitted of the charges.

In the case where a corporation pursues one of its own directors for an act done in the exercise of his/her duties, the corporation will typically only assume the director’s expenses if the corporation loses its case and the court so decides. If the corporation only wins its case in part, the court may decide the amount of expenses that the corporation must pay.

A corporation can purchase insurance to benefit directors against any liability incurred by them for failing to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

What Power does a Director Have?

Directors are responsible for administering the affairs of the corporation. More specifically, they are able to adopt resolutions in a number of areas which include:

  • the issuance and registration of share certificates, transfers, allotment and payment of shares;
  • declaring and paying dividends;
  • the number, term of office and remuneration of directors;
  • the appointment, functions, duties and removal of officers; and
  • the time and place of holding of annual meetings, calling of regular and special meetings of the board of directors and the procedure to be followed at said meetings.
What are Directors' Duties and Responsibilities?

A director must, in the performance of his/her duties, satisfy all the obligations imposed upon him/her by law as well as the corporation’s Articles of Incorporation and By-Laws, and he/she must act within the limits of the powers conferred upon him/her.

Act With Prudence And Diligence

Legislation typically requires every director to exercise reasonable care and prudence, while taking into account the director’s competence, experience and position in the corporation. This statutory duty does not require a director to be competent per se, but it obliges a director to do his/her best, given that person’s competence and business sense. A director must also act with diligence in order to compensate for any weakness he/she might have by seeking the aid of qualified advisors.

Honesty And Loyalty

Legislation also often imposes a good faith requirement upon all directors by obliging them to act with honesty and loyalty and in the best interest of the corporation. Unless he/she is expressly authorized to do so by the corporation, a director cannot mingle the corporation’s property (tangible or intangible) with his/her own, as well as use any of the corporation’s property or information he/she obtains by reason of his/her duties for his/her own profit or that of a third party.

A director must also generally avoid placing him/herself in a conflict of interest position (i.e., his/her personal interest is in conflict with his/her obligation as director). Consequently, a director must notify the corporation of any interest he/she has in an enterprise or association that may place him/her in a conflict of interest. The nature and value of this interest must be declared and recorded in the minutes of the meeting of the board of directors.

A director must also generally inform the corporation of any contracts he/she entered into with said corporation or the acquisition of any rights in property under his/her administration. The nature and value of the rights he/she acquired must be declared and recorded in the minutes of the meeting of the board of directors and he/she must abstain from discussing and voting on the matter unless it concerns the remuneration or conditions of employment of the director.

Where the director fails to give information correctly and immediately of an acquisition or a contract, the corporation, or a member thereof, may sometimes apply to the court to annul the act or order the director to render an accounting and to remit the profit realized to the corporation.

Exceptional Liabilities

Legislation sometimes provides that money that is distributed by the corporation for the improper payment of a dividend or loan to a shareholder, the improper acquisition or payment of shares, or the improper repurchase or redemption of shares, can be recovered from its directors.

A director who is present at the meeting where the improper distribution of money was approved of may be deemed to have approved of any resolution or participated in any measure taken at that meeting, unless he/she demands at the meeting that his/her dissent be registered in the minutes or he/she notifies the secretary of the meeting in writing of his/her dissent before the adjournment of the meeting.

Dissolution Of Corporation

Legislation often holds directors of a corporation jointly and severally liable for the debts of the corporation existing at the time of dissolution, to every creditor who has not given his/her consent to the dissolution. A director can sometimes exonerate him/herself from liability by proving he/she had acted in good faith.

Improper Transfer Of Shares

If directors consent to the transfer of shares without the entire amount being paid and the person does not have the means to pay the shares in full, legislation generally holds that the directors are jointly and severally liable to the corporation’s creditors.

A director can sometimes exonerate him/herself if within a certain prescribed period of becoming aware of the improper transfer, the director protests in the minutes of the meeting, and then publishes this protest in a newspaper published at the place in which the registered office is located.

Employees’ Wages

Directors may be jointly and severally liable to its employees for wages due for services rendered to the corporation while they were directors.


If the corporation commits fraud, any interested person (e.g., shareholder, creditor, supplier) may hold the directors who participated in the alleged act or derived personal profit from it liable for any damage suffered by the corporation.

Environmental Legislation

As a general rule, every director who orders, authorizes, advises or encourages the corporation to refuse or neglect to comply with an order not to emit, deposit, release or discharge a contaminant into the environment may contravene a provision of applicable legislation or its regulations, and may commit an offence and is liable to various fines and/or a prison term.

Tax Matters

As a general rule, if a corporation fails to either deduct, withhold, remit or pay the amounts required to the Receiver General pursuant to the Income Tax Act or to remit the GST as required by the Excise Tax Act, the directors of the corporation at that time are jointly and severally liable, together with the corporation, to pay the amount due as well as any interest or penalty charges. However, directors will typically only be held liable to pay these amounts in cases of liquidation, dissolution or bankruptcy of the corporation or following an unsatisfied execution against the corporation.

A director can sometimes exonerate him/herself from liability by proving he/she exercised the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances.

What is an Officer?

An officer is an individual who runs the business of the corporation with respect to day-to-day operations. These individuals form part of the senior management team and are designated with such titles as: President, Vice-President, Chief Executive Officer, Chief Financial Officer and the like.

How do People Become Officers?

The rules governing the appointment, functions, duties, removal and remuneration of officers are found in the corporation’s By-Laws. These By-Laws need not be approved by the shareholders in order to have effect and thereby protect third parties who conduct business with the corporation through its officers.

The directors are most often responsible for appointing the officers. They usually do so during the board of directors’ meeting which immediately follows the annual shareholders’ meeting.

How can Officers be Removed from their Position?

Directors have the power to remove officers as long as they are empowered to appoint them. Removal of officers does not require a special reason to be given. In fact, a corporation’s By-Laws usually stipulate that their removal is based on the discretion of the directors.

Do Officers get Paid?

The remuneration of officers is set by the directors, unless there is a specific provision to the contrary in the corporation’s Articles of Incorporation, By-Laws or unanimous shareholders’ agreement. With respect to indemnification of officers in case of legal proceedings instituted against them, the rules applicable to directors apply to officers as well.

What are the Powers of Officers?

Typically, officers have the competency to act on behalf of the corporation only if the corporation authorized them to perform these acts and recognized in advance that they will be bound by the officers’ acts. This authorization can be express or implied (i.e., derived from the relevant officer’s title).

What are the Duties and Responsibilities of Officers?

The obligations and responsibilities of officers are similar in nature to those of directors. In particular, officers have an obligation of honesty and loyalty as well as one of prudence and diligence. Officers may also share certain statutory obligations and liabilities with directors.

What Does "Organizing The Corporation" Mean?

Once the corporation has been incorporated and the Articles of Incorporation have been filed with the relevant government department or authority, the next step involves formally organizing the corporation.

All of the required steps to organize your corporation will have been performed by the time you have received your corporation’s Articles of Incorporation, its minute book and all other required documentation (corporation’s by-laws, organization resolutions, etc.) from The remaining task will be for you, and the other directors, and shareholders, if any, to sign the relevant resolutions, share certificates, minutes and other documents. All such documents will clearly indicate where each person must sign.

What is an Organizational Meeting?

Typically, the directors of the corporation must hold an organization meeting. The meeting can be called by an incorporator or a director and it is recommended that it be held as soon as possible. Each director must be notified in writing in advance of the date, time and place of the meeting.

At this meeting, the directors are typically required to issue at least one share and they can also perform the following:

  • adopt general By-Laws;
  • appoint officers;
  • adopt banking arrangements;
  • adopt a corporate seal, if necessary;
  • set the fiscal year; and
  • approve the form of the share certificate for each class of shares.
What are "By-laws" of the Corporation?

The general By-Laws of the corporation govern the day-to-day activities of the corporation. The By-Laws vary depending upon the corporation, but in general they deal with matters such as the registered office, corporate seal, fiscal year, authority to dispose of securities, borrowing powers and general information concerning the officers, directors, shareholders’ meetings, transfer of shares, payment of dividends, loans and notice requirements. The By-Laws must be ratified by a resolution of the board of directors. As soon as the resolution is adopted, the By-Laws come into effect.

The By-Laws (with the exception of the various provisions relating to the agents, officers and servants of the corporation) will only have effect until the next annual shareholders’ meeting of the corporation, unless they are ratified in the meantime by a general meeting of the corporation. If the By-Laws are not confirmed at the annual meeting, they will cease to have effect from that date.

What are the Corporation's Registers?

Once the corporation has been organized, the various registers found in the corporation’s minute book must be completed.

Directors Register

This lists the names of all the directors along with their addresses, the date on which they became a director and the date on which they ceased to be one.

Shareholders Register

Entered in this register is the name and address of every person who holds shares in the corporation, along with the date on which they became a shareholder and the date on which they ceased to be one.

Share Register

This lists in alphabetical order the name and address of each shareholder for each class of shares, along with the date on which the shares were purchased, the share certificate number, the price paid for each share, the total amount paid and the aggregate number of shares held by each shareholder.

Share Transfer Register

Entered in this register are all stock transfers that have taken place over time, including the number and date of the transfer, the name of the transferor and transferee, the number of shares transferred and both the certificate number that was cancelled and issued.

What is an Annual Government Filing?

Every year, the corporation must update the information provided in its initial filing by reporting an annual filing. The annual filing, which is mailed to the corporation, must be filed within the prescribed dates. The annual filing must be accompanied by the amount of the annual filing fee (amount varies depending on jurisdiction – see below). However, if the annual filing is not filed within the prescribed delay, a penalty fee may be incurred. If a corporation fails to file its annual filing, the government body or department can send a notice stating that if the corporation does not file the missing annual filing, the corporation may be struck off government records or even dissolved. As such, corporations should pay careful attention to filing deadlines. offers maintenance services which facilitate these annual filings (create link to maintenance).

The government fees will vary depending on the jurisdiction of your corporation. Below is a chart outlining the current annual government filing fees for each jurisdiction.

Jurisdiction Current Annual 
Government Fees
Federal $25
Alberta $50
British Columbia $35
Manitoba $40
New Brunswick $60
Newfoundland $50
Nova Scotia $85
Ontario $22
Prince Edward Island $30
Quebec $79
Saskatchewan $50
What are Shareholders' Meetings?

There are two types of shareholders’ meetings: (a) the annual shareholders’ meeting; and (b) the special meeting.

Annual Shareholders’ Meetings

Legislation typically requires that a shareholders’ meeting take place on an annual basis. The meeting is held at the time provided for in the corporation’s Articles of Incorporation or By-Laws. In most cases, the corporation’s By-Laws provide the directors with a great amount of latitude as to when the meeting is to be held.

The corporation’s Articles of Incorporation or By-Laws usually stipulate where the meeting is to take place. If no place is specified, the meeting is held at the registered office of the corporation.

Unless there are provisions to the contrary in the Articles of Incorporation or By-Laws, notice of the time and place of the meeting must be given beforehand by registered or certified mail to each shareholder at his/her last known address. A shareholder can waive the notice requirement with respect to the holding of the shareholders’ meeting by either signing a written waiver or attending the meeting.

During the annual shareholders’ meeting, the shareholders perform the following tasks:

  • receive, study and approve the balance sheet and other financial statements submitted to them by the board of directors as well as the auditor’s report;
  • ratify resolutions adopted by the directors during the year;
  • elect directors for the upcoming year;
  • in small corporations, ratify all acts done by directors and officers during the past year; and
  • appoint auditors. Shareholders of a private corporation may, in certain jurisdictions, decide by way of resolution not to appoint an auditor. This resolution, which remains valid until the next annual meeting, may require the consent of all shareholders including those who are not entitled to vote. The auditor, whose term of office expires at the next annual meeting, is generally a chartered accountant and is not a director or officer of the corporation. His/her remuneration is fixed by the shareholders, but this power is often delegated to the directors.

Special Meetings

Shareholders can also meet under exceptional circumstances. A special meeting can be called by the shareholders, directors or a judge.

  • meeting convened by shareholders 
    At any given time, the shareholders might wish to meet in order to discuss urgent problems and take all steps that are necessary. The secretary of the corporation must receive a written request signed by a minimum percentage of the holders of the subscribed shares of the corporation, describing the objects of the proposed meeting. The director must then convene a special meeting to discuss the matters mentioned in the written request.
  • meeting convened by directors 
    The notice of the meeting must state the business that is to be discussed and it must be sent to the shareholders in accordance with the corporation’s By-Laws. If there are no specific provisions with respect to the notice requirement, the rules regarding the annual shareholders’ meetings would generally apply.
  • meeting convened by a judge 
    When a compromise or arrangement is proposed between the corporation and its shareholders which affects the rights of shareholders, a judge sitting in the district where the corporation has its registered office, may, in certain circumstances, on application by the corporation or any shareholder, order a shareholders’ meeting or a meeting of any class of shareholders in a manner as directed by the judge.


What is a Board of Directors Meeting?

There are two types of board of directors’ meetings: (a) regular – these meetings take place at a fixed date as provided for in the By-Laws; and (b) special – this comprises all other meetings of the board of directors.

As is the case with shareholders’ meetings, directors must be notified of every meeting of the board of directors, subject to a few exceptions. In most cases, the By-Laws stipulate that notice must be given by the corporation’s secretary upon instruction by the president, vice-president or any number of directors. The meeting can be validly held without notice if either all the directors are present or a director waives the notice requirement in writing. The notice does not have to specify which matters are to be discussed during the meeting, unless there are provisions to the contrary in the By-Laws.

Annual Meetings

The board of directors typically meets at least twice a year, before and after the annual shareholders’ meeting. At the first meeting, the directors study the reports to be given to the shareholders and they adopt the balance sheet that they will present to the shareholders. At this meeting, a resolution is adopted which authorizes the directors to sign the balance sheet on behalf of the board. The directors then convene the annual shareholders’ meeting.

The subsequent meeting usually takes place immediately after the closing of the shareholders’ meeting. The newly elected or re-elected directors meet to elect the officers for the coming year and if the shareholders decide not to elect an auditor, an accountant is appointed by the board.

Special Meetings

A meeting of the board of directors can also take place anytime during the year. They can be held for a number of reasons which include:

  • the purchase, sale or lease of the corporation’s property;
  • the purchase or repurchase of shares of the corporation;
  • to declare and pay a dividend;
  • to fill a vacancy in the board of directors;
  • to elect, remove or replace an officer;
  • to institute legal proceedings in the corporation’s name; or
  • to adopt banking resolutions.
What are Articles of Dissolution?

Articles of dissolution are the mechanism which the corporation files with the relevant corporation when it wishes to terminate its existence.

If your corporation is ceasing operations, is already is no longer in business, or was never actively used, it must submit a filing called “articles of dissolution” with the government in which your corporation was formed in order to formally dissolve your corporation or non-profit corporation.

What do I have to do to stop operating my business/corporation?

There are a number of steps involved in dissolving a business. can directly assist with the dissolution filing with the jurisdiction of incorporation. However there are other steps that only you can take care of, for example, filing the corporation’s last tax return and closing all tax accounts.

There are six primary steps involved when dissolving a company. They are: 

  • Corporate action
  • Filing articles of dissolution with the jurisdiction of incorporation
  • Filing all necessary federal, provincial, and local tax forms
  • Statutory notification to creditors
  • Settling creditors’ claims
  • Distribution of remaining business assets
What is the process to file Articles of Dissolution?

The owners of the corporation must approve the dissolution of the business. With corporations, the shareholders must approve this action. The bylaws of a corporation typically outline the process for dissolution in terms of necessary approvals. To comply with the formalities of a corporation, the board of directors should draft and approve the resolution to dissolve the corporation. The shareholders should then vote on that resolution once approved by the directors. Both actions should be documented and placed in the corporate record book. The percentage required to approve dissolution depends on the jurisdiction, but is typically not less than 2/3 majority.

After the shareholders or members have voted to dissolve the corporation, the appropriate paperwork must be filed with the jurisdiction of incorporation in which the business was formed. If the corporation is Federal, then it must also file the appropriate paperwork in the province(s) it is registered in.

The process for filing the certificate of dissolution varies by jurisdiction. Some jurisdictions of incorporations require the documents be filed before notifying creditors and resolving claims. Other jurisdictions require the documents be filed after that process.

Ontario corporations (not Federal corporations located in Ontario) require tax clearance for the corporation before the certificate of dissolution can be filed. In these cases, any back-taxes owed by the corporation must first be paid. prepares and files certificates of dissolution in all Canadian jurisdictions. You can order our dissolution service online by clicking here.

What are the Government Fees to Dissolve a Corporation?

Below are the current government dissolution fees for Canadian jurisdictions:

Jurisdiction Government
Dissolution Fees
Federal None
Alberta $50
British Columbia $20
Manitoba $50
New Brunswick $62
Newfoundland $0
Ontario $25
Prince Edward Island $10
Quebec $0
Saskatchewan $0
Yukon $20

Moreover, if you are incorporating a federal corporation, you must also remove your federal corporation from the provincial registry.

Province Extra-provincial
Dissolution Fee
Alberta $0
British Columbia $20
Manitoba $50
Newfoundland $10
New Brunswick $0
Ontario $0
Prince Edward Island N/A
Quebec $0
Saskatchewan $0
Yukon Territory $20
What is the effect of dissolution on government tax accounts?

Because you are ceasing operations, your tax obligations do not immediately cease. You must formalize the closing of the business with the Canada Revenue Agency as well as your provincial and local taxing agencies. The CRA includes a form for closing business tax accounts. Also, do not overlook payroll reporting obligations if you have employees. Click here for more information.

It is recommended that you consult with an accountant or tax advisor on the requirements for your particular business.


What do I do if the corporation has property left over?

After payment of creditors’ claims, the remaining assets, if any, may be distributed to the owners of the company. Assets are distributed in proportion to the share of ownership of “common” and “participating” shares. If you have a corporation that has multiple classes of stock, such as common and preferred shares, the corporate bylaws typically outline the procedure for distributing assets to these shareholders. For additional information on the distribution of assets, it is best to contact an accountant or tax advisor.

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