The laws governing corporations stipulate certain conditions for serving as a director. A person who does not meet these conditions cannot be elected or appointed as a director or, depending on the circumstances, continue to serve as such.
The grounds for disqualification may vary depending on whether the company is incorporated in Quebec or under federal law. They may include, but are not limited to:
It is therefore important to check the eligibility requirements set out in the law under which the company was incorporated before proceeding with the election or appointment of a director.
The articles of incorporation or other corporate documents may also contain rules regarding the composition of the board of directors, subject to mandatory legal requirements. Under federal law, Canadian residency requirements also apply to the composition of the board of directors. Generally, at least 25% of the directors must be Canadian residents, and if the corporation has fewer than four directors, at least one must be a Canadian resident. Specific rules apply to certain corporations.
In summary , not everyone can be a director of a corporation. Before an election or appointment , it is recommended to verify the eligibility requirements and grounds for disqualification under applicable law, as well as, under federal law, the Canadian residency requirements for directors.