Under Canadian corporate statutes, shareholders are entitled to requisition meetings of shareholders in order to, among other things, replace directors. Under the CBCA, registered shareholders holding not less than 5 per cent of the outstanding shares of a corporation that carry the right to vote at a meeting may requisition a shareholder meeting. A requisition is required to state the business to be transacted at the meeting and must be sent to each director and to the registered office of the corporation.
A recent Ontario court decision has held that, where a requisition includes the removal and replacement of directors, the requisition must include sufficient detail to allow shareholders to make an informed decision about the business to be transacted at the meeting, which would include the names and qualifications of the proposed new directors.
Upon receiving a valid requisition, the directors of a CBCA company must call a meeting of shareholders within 21 days, failing which any shareholder who signed the requisition may call the meeting. The time frame for actually holding the meeting, as opposed to calling it, is generally within the discretion of the board of directors, subject to judicial challenge. The timing of the meeting is a matter that is litigated from time to time in Canada as a board of directors will frequently set the meeting date some months down the road. There are certain exceptions to the requirement for the board of directors to call a meeting of shareholders in response to a requisition, including where a record date for a meeting has already been set and notice of it has been given, or where the directors have already called a meeting of shareholders and notice of it has been given.
Shareholders under most corporate statutes can act by written consent in lieu of a meeting, however, it must be unanimous.
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