Qualifications to be a Director of a Canadian Corporation

How do you know if you are qualified to be a director for a Canadian corporation?

The answer is surprisingly easy. There are no specific legal requirements for directorship in Canada. The law in Ontario is similar.

Instead, the Canada Business Corporations Act (“CBCA”), at section 105(1) sets out the four criteria that would disqualify someone from being a director, namely:

  • anyone who is less than eighteen years of age;
  • anyone who is incapable;
  • a person who is not an individual;
  • a person who has that status of bankrupt.

Similarly, Ontario’s Business Corporations Act (“OBCA”), at section 118(1) sets out four similar criteria that would disqualify someone from being a director, namely:

  • A person who is less than eighteen years of age;
  • A person who has bee found under the Substitutes Decisions Act, 1992 or under the Mental Health Act to be incapable of managing property or who has been found to be incapable by a court in Canada or elsewhere.
  • A person who is not an individual.
  • A person who has the status of bankrupt.

Although the foregoing disqualifying properties are fairly straightfoward, the criteria of A person who is not an individual can be tricky to understand. At law person has a defined meaning, which, for example, includes corporations. At law corporations have, for the most part, the same legal status as persons. Corporations, in fact, are persons. Corporations are not, however, indviduals (i.e. human individuals). Therefore, we can conclude that a corporation, despite being a legal person, cannot be a director of another corporation because a corporation is not an individual.