Shareholder right to examine corporate records

A buyer of shares may want to read the securities register and the shareholder minutes before closing. A buyer who is not yet a shareholder is not among the people section 21 of the federal Act names for a corporation that is not a distributing corporation, so access before closing is a matter to agree with the seller. See what to look for in the minute books and the securities register.

Federal corporations

Section 21(1) of the Canada Business Corporations Act lets shareholders and creditors of a corporation, their personal representatives and the Director examine the records described in section 20(1) during the corporation’s usual business hours and take extracts free of charge, subject to subsection 21(1.1), which adds an affidavit step for the securities register of a distributing corporation. Section 20(1) lists the articles and by-laws, any unanimous shareholder agreement, minutes and resolutions of shareholders, certain notices and the securities register. Directors’ minutes are kept under section 20(2).

Ontario corporations

Section 145(1) of Ontario’s Business Corporations Act lets registered holders of shares, beneficial owners of shares and creditors of a corporation, and their agents and legal representatives, examine the records in section 140(1), other than the register of individuals with significant control, during usual business hours and take extracts free of charge; if the corporation is an offering corporation, any other person may do so on payment of a reasonable fee. This entry covers the federal and Ontario Acts only; check the rules where the company is incorporated.