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1. What corporate records and directors records must be kept?
❖ 20 (1) states that every corporation must prepare and maintain, at its registered office or
at any other place in Canada designated by the directors, records containing
the articles and the by-laws, and all amendments thereto, and a copy of any unanimous
(b) minutes of meetings and resolutions of shareholders;
(c) copies of all notices required by section 106 or 113; and
(d) A securities register that complies with section 50.
Marginal note: Directors records
❖ (2) In addition to the records described in subsection (1), a corporation shall prepare and
maintain adequate accounting records and records containing minutes of meetings and
resolutions of the directors and any committee thereof.
2. What tests must be met before the directors can declare a dividend?
42 A states that a corporation shall not declare or pay a dividend if there are reasonable grounds
for believing that
The corporation is, or would after the payment be, unable to pay its liabilities as they
become due; or
(b) The realisable value of the corporation’s assets would thereby be less than the
aggregate of its liabilities and stated capital of all classes.
How many directors must the corporation have?
Canada Business Corporations Act (2) states that a corporation shall have one or more directors
but a distributing corporation, any of the issued securities of which remain outstanding and are
held by more than one person, shall have not fewer than three directors, at least two of whom are
not officers or employees of the corporation or its affiliates.
After the corporation is created what do the directors do at their first meeting?
After incorporation, the incorporators or first directors are required to call an "organisational
meeting" of the directors. The main goal of this first meeting of the directors is to organise the
corporation by adopting a number of resolutions that will allow the corporation to conduct its
activities. A minimum of five days' notice of this meeting must be given to each director listed in
Form 4002 – Initial Registered Office Address and First Board of Directors. During this meeting,
the directors will make by-laws, appoint officers, make banking appointments and appoint an
interim public accountant.
5. How long do directors hold office for after the first meeting of shareholders?
The general rule in the Canada Business Corporations Act is that directors are elected by a
majority of the votes cast at an annual meeting of the members and they can hold the office for a
term that cannot exceed four years. (see Directors terms and vacancies on the board of directors;
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