A director is an individual who is elected by the shareholders (owners) of the company to assist with the management and supervision of the day to day affairs of the company. Frequently the directors of a company are also the owners of the company. Not just anyone can be a director of an Ontario company. In order to meet the qualifications for directors of Ontario companies reference must be made to the statute that governs Ontario companies.
How many directors can an Ontario Company Have
Ontario companies must have at least one director for private companies and at least three directors for public companies. There is no limit on the number of directors an Ontario company may have and if a private company wishes to have many directors it may do so.
Who can Qualify to Act as a Director of an Ontario Company
The Business Corporations Act (Ontario) explains this requirement by outlining what disqualifies someone from being a director of an Ontario company.
The following persons are disqualified from being directors of an Ontario company:
- A person who is less than 18 years of age;
- A person who has been found under the Substitute Decisions Act, 1992 (Ontario) or under the Mental Health Act (Ontario) to be incapable of managing property or who has been found to be incapable by a court of Canada or elsewhere;
- A person who is not an individual; or
- A person who has the status of bankrupt.
Director’s Consent to Act as a Director
A person cannot be appointed to be a director of an Ontario company unless that person has agreed to do so. The Act provides that after an individual is elected as a director they must consent in writing to the appointment within ten days. This written consent is inserted into the minute book for the Ontario company and maintained there for future reference.
Resident Canadian Requirement for Directors of Ontario Companies
There is a requirement for 25% of the directors of an Ontario company to be “resident Canadians”. For more information about this requirement refer to Resident Canadian Requirements for Directors of Ontario Companies.