Fundamental change (CBCA)

Shareholders meet this phrase when they are asked to vote on an amendment, an amalgamation or a sale. The CBCA places these steps in Part XV, headed Fundamental Changes. Corporations Canada notes that a special meeting of shareholders may deal with whether to approve a fundamental change proposed by the directors.

What the Act requires

• Amending the articles is done by special resolution under s. 173(1), subject to s. 176 (separate class votes) and s. 177.
• An amalgamation agreement is adopted when the shareholders of each amalgamating corporation approve it by special resolutions (s. 183(5)), subject to class votes under s. 183(4). Corporations Canada says a short-form amalgamation is approved by a directors’ resolution without shareholder approval.
• A sale, lease or exchange of all or substantially all the property of a corporation, other than in the ordinary course of business, is adopted when the holders of each class or series entitled to vote on it approve it by special resolution (s. 189(3) and (8)).

Dissent

Section 190(1) lets a shareholder dissent from some of these steps, including a sale of all or substantially all property under s. 189(3), subject to ss. 191 and 241. Read dissent rights and whether shareholders have dissent rights when a company sells its assets. This entry covers corporations under the CBCA; check the statute your corporation was incorporated under.