Corporate Governance Lawyer

Christopher R. Neufeld

Neufeld Legal Professional Corporation

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DIRECTORS: GOVERNANCE, RESPONSIBILITY, LIABILITY

 Board of Directors  -  Sub-Committee  -  Officer  -  Director  -  Shareholder

A company's directors are principally charged with developing the long-term planning of the company, while overseeing its ongoing operations by the officers and management. This can be a substantial undertaking for an individual accepting the nomination of the company's shareholders to be a director, given the responsibility and potential liability associated with being a corporate director. There are also significant procedural requirements emanating from the company's governance and practices, together with the challenges arising from working with other directors on the company's board (or in specific sub-committees). 

The Alberta Business Corporations Act provides substantive statutory guidelines related to directors, in particular in Part IX (Directors and Officers). Section 105 sets forth the base requirements for directors with an Alberta-incorporated company, stating that:

"105(1) The following persons are disqualified from being a director of a corporation:

(a) anyone who is less than 18 years of age;

(b) anyone who

  (i) is a represented adult as defined in the Adult Guardianship and Trusteeship Act or is the subject of a certificate of incapacity that is in effect under the Public Trustee Act,

  (ii) is a formal patient as defined in the Mental Health Act,

  (iii) is the subject of an order under the Mentally Incapacitated Persons Act, RSA 1970 c232, appointing a committee of the person or estate, or both, or

  (iv) has been found to be a person of unsound mind by a court elsewhere than in Alberta;

(c) a person who is not an individual;

(d) a person who has the status of bankrupt.

(2) Unless the articles otherwise provide, a director of a corporation is not required to hold shares issued by the corporation.

(3) At least 1/4 of the directors of a corporation must be resident Canadians."

At Neufeld Legal PC, we work with corporate directors in understanding their responsibility to the company and the law, providing them with legal guidance relative to corporate governance, responsibility and liability issues. For further information with respect to our corporate governance practice as it relates to company directors, contact lawyer Christopher Neufeld at Chris@NeufeldLegal.com or 403-400-4092.

Corporate law in Calgary and Alberta is driven in part by statute and the interpretation / application thereof. A key statute is the Business Corporations Act (Alberta), with the following being a segment thereof that is of significance: 

"118(1) Directors of a corporation who vote for or consent to a resolution authorizing the issue of a share under section 27 for a consideration other than money are jointly and severally liable to the corporation to make good any amount by which the consideration received is less than the fair equivalent of the money that the corporation would have received if the share had been issued for money on the date of the resolution. "

It should nevertheless be noted that this represents merely an extract from the statute, with the full text being available at the following link. Also, it is advisable in almost all circumstances to engage knowledgeable legal counsel to deal with matters of a legal nature and how the provincial statute impacts your business.

The law offices of Neufeld Legal P.C. (headquartered at 1600, 144 4th Avenue, Calgary, Alberta) are directed at provided businesses in Calgary, and throughout Alberta, with experienced and competent legal services that are intended to assist in the advancement of business-related legal projects, from contracts and buying/selling a business to joint ventures / strategic partnership and commercial financing. Much of my professional and personal drive emanates from a desire to truly understand the inner workings of business and how it is possible to make businesses succeed and thrive financial, which I have sought to bring to my legal practice and work with business leaders who are striving to make the most of their opportunities, while overcoming substantial challenges as they arise. Calgary. Legal Disclaimer. Privacy Policy. Copyright 2014.