Generally, yes, but there are exceptions. A corporation must normally have the minimum number of directors required by the law under which it was incorporated, or by its articles of incorporation or bylaws.
In many SMEs, a single person may be called upon to serve as a director. It is therefore common for the sole shareholder to also be the sole director of the company.
In Quebec, an important exception exists for certain companies with a sole shareholder. When this shareholder removes all powers from the board of directors by means of a sole shareholder declaration, in accordance with the Business Corporations Act , the sole shareholder may choose not to establish a board of directors or appoint an auditor. The sole shareholder then exercises the powers and assumes the rights, duties, and responsibilities that would otherwise have belonged to the board of directors.
Another exception exists in Quebec under the Business Corporations Act . When a unanimous shareholders' agreement removes all the powers of the board of directors, the shareholders may choose not to establish a board of directors. The individuals to whom these powers are transferred then assume, to the extent provided by law, the associated rights, powers, duties, obligations, and responsibilities.
These exceptions do not necessarily apply to companies incorporated under a different legal regime. It is therefore important to verify the law under which the company was incorporated before concluding that it can operate without a director.
When a director resigns, dies, becomes incapacitated or disqualified, or is removed, it is also necessary to verify that the company still meets the applicable requirements and, if necessary, to appoint a replacement. Corporate records and government filings should then be updated.
In summary , a corporation generally requires at least one director. In Quebec, however, a corporation with a sole shareholder can operate without a board of directors when a declaration by the sole shareholder withdrawing all board powers is in effect. Similarly, a Quebec corporation whose unanimous shareholders' agreement withdraws all board powers may, under the conditions prescribed by law, choose not to establish a board of directors.