Resident Canadian director requirement

A foreign buyer meets this rule when it incorporates a Canadian company or takes over a company with an existing board. Under CBCA s. 105(3), a stated share of directors must be resident Canadians, with a different test where a board is small. Section 105(3.1) sets a higher test for corporations in prescribed sectors or with ownership or control requirements, subject to s. 105(3.3) for boards of one or two directors and a holding-corporation exception in s. 105(4), and Corporations Canada names airlines, telecommunications and some cultural sectors as examples.

What the CBCA also says

• A “resident Canadian” is defined in s. 2(1) by citizenship or permanent residence together with ordinary residence in Canada, with conditions.
• Directors, other than those of a holding corporation under s. 105(4), may not transact business at a meeting unless enough resident Canadians are present (s. 114(3)), subject to the exception in s. 114(4).

Ontario and Alberta

Ontario’s Business Corporations Act lists the persons disqualified from being a director in s. 118(1) with no residency test, and shows s. 118(3) as repealed. Alberta’s lists its disqualifications in s. 105(1) with no residency test, and shows s. 105(3) as repealed, but requires an agent for service who is a resident Albertan (s. 20.1). This entry covers the CBCA, Ontario and Alberta only, so read the statute where the company is incorporated. See whether a foreign buyer can buy a Canadian business and federal vs provincial incorporation.