Canadian corporate law: Difference between revisions

* ''[[Canada Cooperatives Act]]''

:* ''Proxy Voting Principles and Guidelines''<ref>{{cite web|title = Proxy Voting Principles and Guidelines|url = http://www.cppib.com/content/dam/cppib/How%20we%20invest/Responsible%20Investing/Proxy%20Voting/Proxy_Voting_Principles_and_Guidelines.pdf|publisher = [[Canada Pension Plan Investment Board]]|date = 14 February 2013}}{{Dead link|date=November 2018 |bot=InternetArchiveBot |fix-attempted=yes }}</ref>

:* ''2013 Best Practices for Proxy Circular Disclosure''<ref>{{cite web|title = 2013 Best Practices for Proxy Circular Disclosure|url = http://www.ccgg.ca/site/ccgg/assets/pdf/2013_best_practices.pdf|publisher = Canadian Coalition for Good Governance|access-date = 2013-12-11|archive-url = https://web.archive.org/web/20140630133136/http://www.ccgg.ca/site/ccgg/assets/pdf/2013_best_practices.pdf|archive-date = 2014-06-30}}</ref>

:* ''Proxy Voting by Canadian Mutual Funds 2006–2009''<ref>{{cite web|author1 = L O’NeillO'Neill|author2 = J Cook|title = Proxy Voting by Canadian Mutual Funds 2006–2009|url = http://www.share.ca/files/SHARE_Mutual_Fund_Voting_Report_2010.pdf|publisher = SHARE|location = Vancouver|date = September 2010}}</ref>

Directors set their own remuneration.<ref>{{cite web|title = CBCA, s. 125| date=January 2020 |url = http://laws-lois.justice.gc.ca/eng/acts/C-44/section-125.html}}</ref> They have a fiduciary duty to not put their own interests first when setting it. Some case law exists where decisions about remuneration were not reached fairly, or where directors’directors' fees are unusually high, thus attracting [[oppression remedy]] claims under the various corporate statutes. Otherwise the remuneration committee should be composed of independent directors. There is no [[say on pay]] rule in the CBCA. However, a large number of Canadian companies have been having say on pay votes, as a result of shareholder proposals to change company constitutions in order to introduce them.

:* ''51-102: Continuous Disclosure Obligations''<ref>[http://www.osc.gov.on.ca/documents/en/Securities-Category5/rule_20111031_51-102_unofficial-consolidation-post-ifrs.pdf ''51-102: Continuous Disclosure Obligations'']</ref>

:* ''52-109: Certification of Disclosure in Issuers' Annual and Interim Filings''<ref>[http://www.osc.gov.on.ca/documents/en/Securities-Category5/rule_20101210_52-109_unofficial-consolidated-post-ifrs.pdf ''52-109: Certification of Disclosure in Issuers' Annual and Interim Filings'']</ref>

:* ''52-110: Audit Committees''<ref>[http://www.osc.gov.on.ca/documents/en/Securities-Category5/rule_20101210_52-110_unofficial-consolidated.pdf ''52-110: Audit Committees'']</ref>

:* ''58-101: Disclosure of Corporate Governance Practices'',<ref>[http://www.osc.gov.on.ca/documents/en/Securities-Category5/rule_20050617_58-101_disc-corp-gov-pract.pdf ''58-101: Disclosure of Corporate Governance Practices''],</ref> the Canadian implementation of the practices recommended by the UK [[Cadbury Report]], made mandatory by the [[Toronto Stock Exchange]] for listed companies.<ref>[http://tmx.complinet.com/en/display/display_main.html?rbid=2072&element_id=256 ''TSX Company Manual'', s. 472]</ref>

While a starting point of Canadian companies is that directors "manage or supervise the management of, the business and affairs of a corporation,",<ref>{{cite web|title = ''CBCA'', s. 102| date=January 2020 |url = http://laws-lois.justice.gc.ca/eng/acts/C-44/section-102.html}}</ref> shareholders may unanimously agree to do a corporate act, regardless of what directors think.<ref>{{cite web|title = ''CBCA'', s. 146| date=January 2020 |url = http://laws-lois.justice.gc.ca/eng/acts/C-44/section-146.html}}</ref> Shareholders can amend the articles with a three-quarters majority vote.<ref>{{cite web|title = ''CBCA'', s. 173| date=January 2020 |url = http://laws-lois.justice.gc.ca/eng/acts/C-44/section-173.html}}</ref>

===Directors’Directors' duties===

:* In ''[[Peoples Department Stores Inc. (Trustee of) v. Wise]]''<ref>{{cite CanLII|litigants=Peoples Department Stores Inc. (Trustee of) v. Wise|link=Peoples Department Stores Inc. (Trustee of) v. Wise|year=2004|court=scc|num=68|format=|pinpoint=|parallelcite=[2004] 3 SCR 461|date=2004-10-29|courtname=|juris=}}</ref> it was held that the duty is not merely owed to the corporation itself, but also to corporate stakeholders, namely "shareholders, employees, suppliers, creditors, consumers, governments and the environment.: This duty is not mandatory. The main directors’directors' duties under Canadian corporate law is the duty of care, and then avoiding conflicts of interest, which include primarily of engaging in undisclosed self-dealing, taking unauthorized corporate opportunities, competing with the company, and being enriched in a takeover bid.

Access to derivative actions and the oppression remedy is available to any complainant, which in the case of the ''CBCA'' includes current and former shareholders, current and former directors and officers, the Director, and "any other person who, in the discretion of a court, is a proper person to make an application under this Part."<ref>{{cite web|title = ''CBCA'', s. 238| date=January 2020 |url = http://laws-lois.justice.gc.ca/eng/acts/C-44/section-238.html}}</ref> In that regard, it can include a creditor of the corporation,<ref>{{cite journal |author= J.S. Ziegel|year= 1993|title= Creditors as Corporate Stakeholders: The Quiet Revolution - An Anglo Canadian Perspective|journal= University of Toronto Law Journal|volume= 43|pageissue= 5113|pages= 511–531|doi= 10.2307/825717|jstor= 825717}}</ref><ref>{{cite CanLII|litigants=First Edmonton Place Ltd. v. 315888 Alta. Ltd.|link=|year=1989|court=abca|num=222|format=canlii|pinpoint=|parallelcite=[1990] 2 WWR 670 |date=|courtname=auto|juris=}} (where a landlord was not paid by a company for rent, after the landlord gave it money as an inducement to rent the property. That money was paid out by the directors to the themselves. This counted as ‘oppression’'oppression'.)</ref> but not every creditor will qualify.<ref>{{cite web|author = Frank Roberts|title = Creditor's use of the oppression remedy|url = http://digitool.library.mcgill.ca/webclient/DeliveryManager?pid=30298&custom_att_2=direct|publisher = [[McGill University]]|year = 2000|access-date = 2 July 2013}}</ref> The court has discretion to dismiss an action where it is found to be frivolous, vexatious, or bound to be unsuccessful.<ref>{{cite CanLII|litigants=Re Marc-Jay Investments Inc. and Levy et al.|link=|year=1974|court=onsc|num=786|format=canlii|pinpoint=|parallelcite=5 OR (2d) 235 |date=|courtname=auto|juris=}}</ref>

48.&nbsp;... The oppression remedy of s. 241(2)(c) of the ''CBCA'' and the similar provisions of provincial legislation regarding corporations grant the broadest rights to creditors of any common law jurisdiction.<ref>{{cite journal|author = D. Thomson|title = Directors, Creditors and Insolvency: A Fiduciary Duty or a Duty Not to Oppress?|url = http://utflr.law.utoronto.ca/sites/utflr.law.utoronto.ca/files/media/UTLFR/utflr58/06_58UTorontoFacLRev31%282000%29.pdf|year = 2000|volume = 58|journal = University of Toronto Faculty of Law Review|issue = 1|page = 48}}{{Dead link|date=May 2019 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> One commentator describes the oppression remedy as "the broadest, most comprehensive and most open-ended shareholder remedy in the common law world."<ref>{{cite book|last = Beck|first = Stanley M.|chapter = Minority Shareholders’Shareholders' Rights in the 1980s|title = Corporate Law in the 80s, Special Lectures of the Law Society of Upper Canada|location = Don Mills|publisher = Richard De Boo|year = 1982|page = 312|isbn = 0-88820110-9}}</ref>

:* Any rectification of a matter complained of can only be made with respect to the person’sperson's interest as a shareholder, creditor, director or officer.

===''Companies' Creditors Arrangement Act''===