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Considerations for Choosing Directors for a Corporation in British Columbia

Updated: Jan 3




1. Eligibility and Qualifications: The British Columbia Business Corporations Act (BCBCA) specifies that a director must be an individual who is at least 18 years old and not declared incapable under any legislation in British Columbia or elsewhere. The director must also not be an undischarged bankrupt.


2. Residency: The BCBCA requires that at least 25% of the directors of a corporation incorporated in British Columbia must be resident Canadians. A resident Canadian is defined as a Canadian citizen or a permanent resident who ordinarily resides in Canada.


3. Consent and Agreement: Before being appointed or elected as a director, an individual must provide their written consent to act as a director. The BCBCA also allows corporations to enter into agreements with their directors regarding their appointment, compensation, and other terms and conditions.


4. Number of Directors: The BCBCA sets out the minimum and maximum number of directors that a corporation must have. A private corporation must have at least one director, while a public corporation must have at least three directors. There is generally no maximum limit on the number of directors, but a corporation's articles or bylaws may impose restrictions.


5. Duty of Care and Fiduciary Obligations: Directors have a duty of care and fiduciary obligations towards the corporation and its shareholders. They must act honestly, in good faith, and in the best interests of the corporation. Directors must exercise the care, diligence, and skill that a reasonably prudent person would exercise in comparable circumstances.


6. Independence and Conflict of Interest: Directors should act independently and avoid conflicts of interest that could compromise their ability to act in the best interests of the corporation. The BCBCA requires directors to disclose their interests in contracts or transactions with the corporation and to abstain from voting on matters in which they have a material interest.


7. Election and Removal: Directors are usually elected by the shareholders of the corporation at an annual general meeting (AGM). The BCBCA provides procedures for conducting AGMs and outlines the process for electing or removing directors. Shareholders may remove a director before their term expires if they pass a special resolution.


8. Resignation and Vacancies: A director may resign from their position by providing a written resignation to the corporation. The BCBCA also addresses the filling of vacancies on the board of directors, whether caused by resignation, removal, death, or other reasons.


9. Powers and Responsibilities: The BCBCA grants directors certain powers and responsibilities, including the authority to manage the business and affairs of the corporation, make strategic decisions, appoint officers, and oversee the corporation's financial activities. Directors are also responsible for ensuring compliance with applicable laws and regulations.


10. Indemnification and Insurance: The BCBCA allows corporations to indemnify directors and officers against certain liabilities incurred in their official capacities, subject to certain conditions. Corporations may also purchase insurance to protect directors and officers from personal liability arising from their duties.



It's important to note that the BCBCA provides a framework for director considerations, but corporations should also take into account any additional requirements or guidelines outlined in their articles of incorporation, bylaws, and other applicable legislation when choosing directors.


Selecting directors for a corporation in British Columbia requires careful consideration of the legal requirements outlined in the BCBCA and elsewhere. Contact us if you would like the benefit of Samuel Osei Law Corporation's experienced small business law firm legal perspective on your director decisions or appointment and vacancy processes.


We are a Vancouver, British Columbia, based small business law firm here for your corporate and commercial needs. Contact us via phone 778-680-6087 or e-mail info@soseilaw.com.

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