Each year a corporation must deal with a few routine matters: approving financial statements, electing directors and deciding whether to appoint an auditor. Small corporations usually do this with written resolutions signed by everyone, instead of holding a meeting.
Written resolutions instead of a meeting
A resolution in writing signed by all directors is as valid as one passed at a directors' meeting (CBCA s. 117(1), OBCA s. 129(1)). A resolution in writing signed by all shareholders entitled to vote is as valid as one passed at a shareholders' meeting (CBCA s. 142(1), OBCA s. 104(1)), and can satisfy the annual meeting requirement.
What annual resolutions usually cover
| Item | Who signs | CBCA | OBCA |
|---|---|---|---|
| Approve financial statements | Directors, then shareholders receive them | s. 155 | s. 154 |
| Elect directors | Shareholders | s. 106 | s. 119 |
| Not appoint an auditor | All shareholders, including non-voting | s. 163 | s. 148 |
| Timing of annual meeting | n/a | s. 133 | s. 94 |
Don't forget the annual return
Annual resolutions are internal records. The annual return is a separate filing with Corporations Canada or the Ontario Business Registry. Our annual resolution templates include a resolution authorizing the filing and confirming the ISC register review.
Sources
This guide is general information, not legal advice. Laws change; confirm current requirements with the statute or a lawyer.
Written resolutions and one-shareholder meetings
Under section 142 of the CBCA, a resolution in writing signed by all the shareholders entitled to vote on it is as valid as if it had been passed at a meeting, and a written resolution dealing with everything an annual meeting must handle satisfies all of the Act's meeting requirements. A copy must be kept with the minutes of shareholder meetings.
Where a corporation has only one shareholder, that shareholder present in person or by proxy constitutes a meeting. Unless the by-laws say otherwise, a quorum is the holders of a majority of the voting shares. Most owner-managed corporations therefore run their year-end business entirely on signed written resolutions kept in the minute book.
Source: laws-lois.justice.gc.ca
Financial statements at the annual meeting
Section 155 requires the directors to place comparative financial statements before the shareholders at every annual meeting, covering a period that ended not more than six months before the meeting, together with any auditor's report. In a small corporation the annual shareholders' resolution usually records receipt of those statements.
A non-distributing corporation with fifty or fewer shareholders entitled to vote is not required to send a form of proxy with the notice of meeting.
Source: laws-lois.justice.gc.ca
Written resolutions under the OBCA
A resolution in writing signed by all the directors entitled to vote is as valid as one passed at a directors' meeting, and a copy must be kept with the directors' minutes. For shareholders, a written resolution signed by all voting shareholders is equally valid, and a written resolution covering everything required at a meeting satisfies the Act's meeting requirements.
Since July 5, 2021, a corporation that is not an offering corporation may also pass an ordinary resolution in writing signed by the holders of a majority of the voting shares, instead of unanimous signatures.
Source: www.ontario.ca
The federal annual return
Every federal business corporation files an annual return with Corporations Canada within 60 days after its anniversary date, which is the date it was incorporated, amalgamated or continued. Filing online costs $12; filing by email or mail costs $40. Corporations Canada sends a personalized reminder and, if nothing is filed, a default notice roughly 90 days after the anniversary.
The annual return is not the T2 income tax return, which goes to the Canada Revenue Agency. A corporation that keeps missing its annual return risks dissolution, and the ISC information has to be filed in the same transaction.
Source: www.ised-isde.canada.ca
The Ontario annual return
Corporations under the Business Corporations Act file an annual return within six months after the end of their taxation year. Since the Canada Revenue Agency stopped accepting these returns on the province's behalf, returns due after October 18, 2021 are filed in the Ontario Business Registry. Filing directly with the Ministry carries no statutory fee; intermediaries who file for you charge their own fee.
To file you need the corporation's company key and its Ontario Corporation Number.
Source: forms.mgcs.gov.on.ca
Federal annual meeting timing and the auditor
Section 133 requires the directors to call an annual meeting not later than eighteen months after the corporation comes into existence, and afterwards not later than fifteen months after the last one and no later than six months after the end of the preceding financial year. The court can extend that time on application.
Under section 163, shareholders of a corporation that is not a distributing corporation may resolve not to appoint an auditor. The resolution lasts only until the next annual meeting and is valid only if every shareholder consents, including holders of non-voting shares. Directors approve the financial statements under section 158, evidenced by a director's signature.
Source: laws-lois.justice.gc.ca