Situation
You are considering incorporating a business. As you plan on carrying on business in more than one province, you intend to incorporate with federal legislation, the Canada Business Corporations Act. As this is your business, you intend on being a director of the corporation. You are particularly concerned about the obligations of directors. However, you are unsure about some of the legal rules that directors must be aware of. Therefore you have decided to do some research to find the answers to your questions. You have looked up the Canada Business Corporations Act online and are sure that it contains the information that you are looking for.
You found the Canada Business Corporations Act at the Government of Canada website:
http://laws-lois.justice.gc.ca/eng/acts/C-44/
You are looking for answers to the following questions. In case you need to refer back to the statute for more detail, you have decided to include the specific section number(s) of the statute in the answers to the questions.
1. What corporate records and directors records must be kept?
2. What tests must be met before the directors can declare a dividend?
3. How many directors must the corporation have?
4. After the corporation is created what do the directors do at their first meeting?
5. How long do directors hold office for after the first meeting of shareholders?
6. What types of corporation payments authorized by directors are improper and may result in the director having to personally repay the corporation?
7. When does a director have to disclose any interest they have in contracts with the corporation?
8. What is the duty of care that a director owes the corporation?
9. What defence is available to a director if it is claimed that the director has violated their duty of care?
10. What information must the directors provide shareholders at shareholder’s meetings?
