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Replacing a director in a Canadian company might look simple, but getting it right involves legal, procedural, and technical precision. If you don’t follow the rules, especially around filings and residency, you risk fines, delays, and even rejection from Corporations Canada.
Check the residency rules first
Not all directors can serve. At least 25% of the board must be resident in Canada. This means they must be:
- Canadian citizens living in Canada, or
- Permanent residents, or
- Citizens abroad in a prescribed category (such as foreign-posted employees)
For federal corporations, this rule applies regardless of where business is carried out.
Who can appoint or remove a director?
In most corporations, directors are appointed by members or shareholders at the annual meeting. The term cannot exceed four years. However, two key exceptions allow for board-appointed directors:
- The board can appoint additional directors between AGMs (up to one-third of the last elected board), but only if this is allowed in the articles.
- The board can fill casual vacancies if there is quorum.
To remove a director, shareholders must pass an ordinary resolution. For directors elected by specific share classes, only that class can remove them.
Meetings and resolutions
Board meetings can be held anywhere and at any time, unless the articles or by-laws say otherwise. Directors may also join by phone or electronically, if permitted.
A quorum must be present. If no quorum exists, the board can’t act. That said, even a single director can act alone if they are the only board member.
When appropriate, directors can skip a meeting and sign a written resolution instead. These written decisions hold the same legal weight as meeting outcomes. Some companies also use consensus decision-making, which must be clearly defined in their by-laws.
Required documents and timing
Here’s what’s typically needed for a director change:
- Board or shareholder resolution
- Resignation letter (if applicable)
- Director’s consent to act
- Passport copy
- Filing form
- Updated company extract
For federally incorporated companies, changes must be reported through Corporations Canada’s online portal. Filing must be completed within 15 days using Form 4006 – Changes Regarding Directors.
To access the portal, your company must use its Corporation Key. This key appears on prior filings or can be requested if lost. Without it, online submissions aren’t possible.
What must be filed?
Corporations Canada requires only a few core details:
- Name and address of the new director
- Date of appointment
- Confirmation of Canadian residency status
- Name and phone number of the authorising officer
Director titles (e.g., CEO, CFO) aren’t relevant at the federal level. However, extra-provincial registrations may have different rules.
Extra-Provincial registrations: Watch the local rules
Federal corporations often register in provinces like Ontario, Alberta, or Nova Scotia. These extra-provincial filings may or may not require director updates, depending on the jurisdiction.
For instance:
- Ontario and British Columbia: Usually don’t require director updates on change.
- Alberta and Nova Scotia: May only ask for updates in the next annual report.
Companies must retain a lawyer or local service provider for these filings. Rules vary, and overlooking local compliance could trigger late penalties or registry issues.
What happens if all directors resign?
If everyone resigns or is removed, and no replacements are named, the person managing the company’s affairs is legally treated as a director. This includes liability, unless they’re a professional advisor or someone acting under a court-appointed role, like a trustee or receiver.
So yes, resigning doesn’t end liability for past actions. Former directors may still be held accountable for any breach of duty before they left office.
What’s next?
Klea offers tailored solutions to streamline compliance and empower your business. Book a demo today and unlock smarter corporate governance.
For more insights into processes in other jurisdictions, explore our article, How to Change a Company Director in Bulgaria.
Legal Disclaimer
The information provided on Klea’s website is made available “as is” for informational purposes only. Klea does not provide legal, tax, or financial advice and is not responsible for any actions taken or not taken based on the content found on this website. In no event shall Klea be liable for any loss or damages arising from reliance on the information contained herein.
For specific legal or compliance support tailored to your business needs, please contact Klea directly. Our team provides personalized guidance and expert solutions. Any reliance on general content without direct consultation does not establish any legal responsibility or liability on Klea’s part.