Quorum (CBCA)

Corporations Canada says no business that is binding on a corporation can be conducted at a shareholders’ meeting unless a quorum is present or represented. It matters when shareholders or directors meet to approve a sale, because the meeting needs one before it can conduct that business.

How the CBCA sets it

Under section 139(1), unless the by-laws provide otherwise, a quorum of shareholders is present if the holders of a majority of the shares entitled to vote at the meeting are present in person or represented by proxy. Section 139(3) says that if no quorum is present at the opening, the shareholders present may adjourn the meeting to a fixed time and place but may not transact any other business. For directors, section 114(2) sets a default of a majority of the number of directors, or of the minimum number of directors, required by the articles, subject to the articles or by-laws. See ordinary resolution, and this answer on a minority shareholder blocking a sale.

What to check

• What the by-laws say, since they can change the quorum.
• Whether the meeting record shows a quorum at the opening.
• Whether the corporation is federal, since this entry covers the CBCA only.