Ordinary Resolution Of Shareholders Template for Canada

An Ordinary Resolution of Shareholders is a fundamental corporate document that allows your company to formally record shareholder decisions requiring simple majority approval (over 50% of votes cast). Unlike special resolutions that require a higher threshold, ordinary resolutions handle routine corporate governance matters efficiently while maintaining proper legal documentation under Canadian corporate law.

When do you need this document?

You'll need an Ordinary Resolution of Shareholders for various routine corporate matters that require shareholder approval. The most common scenarios include appointing or removing directors at annual meetings, approving annual financial statements, selecting or changing auditors, and authorizing routine business transactions within normal corporate operations. You may also use this resolution when shareholders need to approve management compensation plans, ratify board decisions made between meetings, or authorize the issuance of shares within previously approved limits. Additionally, banks and financial institutions often require these resolutions as evidence of corporate authorization before processing significant transactions or facility agreements.

Key legal considerations

The resolution must clearly identify the corporation, state the meeting date or written resolution date, and confirm that proper notice requirements were met according to your corporate bylaws. Quorum requirements must be satisfied, typically requiring at least 25% of eligible shareholders unless your bylaws specify otherwise. The actual resolution text must be precise and unambiguous, clearly stating what action shareholders are approving. You need to include voting results showing the resolution passed by simple majority, and ensure proper certification by the corporate secretary or authorized officer. The document should reference relevant sections of your corporate bylaws and applicable corporate legislation. Remember that certain matters requiring ordinary resolutions may also trigger disclosure obligations under securities legislation if your company is publicly traded.

Legal requirements in Canada

Under the Canada Business Corporations Act (CBCA) for federal corporations, ordinary resolutions require approval by more than 50% of votes cast by shareholders entitled to vote. Provincial corporations follow similar requirements under their respective Business Corporations Acts, such as the Ontario Business Corporations Act. Notice requirements typically mandate 21 days advance notice for shareholder meetings, though your bylaws may specify different timeframes. The resolution must be properly recorded in corporate minutes and maintained in the corporate records book. For written resolutions in lieu of meetings, you generally need consent from all shareholders entitled to vote, unless your constating documents provide otherwise. Public companies must also consider Canadian securities law requirements for disclosure and proxy solicitation when seeking shareholder approval through ordinary resolutions.