Brief Overview of Shareholder Decision Making
and the Right of Dissent
shareholders resolutions are passed by
a majority or two-thirds of the voting
shareholders of the corporation.
For corporations incorporated in the
province of Ontario, the voting threshold
required to pass a resolution is outlined
in the Ontario Business Corporations Act
(OBCA) and changes depending on the
subject matter.
Many privately held corporations
tend to forgo the holding of a formal
shareholders meeting to approve
business decisions and instead pass
written resolutions. This is an acceptable
alternative, provided the written
and signed by all shareholders.
However, where there are sharpening
differences of personality or approach
among shareholders, a unanimous
resolution may not be possible and a
formal shareholders meeting will need to
be held.
Conducting a proper shareholders
meeting, particularly a contentious
shareholders meeting, is a very technical
exercise. It is important that all aspects
of the meeting are properly performed,
otherwise, in certain cases, the business
at the meeting may be held to be invalid.
It is also very important to be aware
of a shareholders right of dissent. A right
certain items of business are proposed to
be passed by resolution. If a shareholder
exercises his or her right of dissent,
that shareholder may demand that the
corporation purchase his or her shares
for fair value.
shareholder of a corporation to demand
to be paid the "fair value" of his/
her shares in the event that certain
shareholders resolutions are passed by
a special majority. The right of dissent
is intended to protect the interests of
minority shareholders.
Henry & Syron LLP. His practice focuses on
advising private companies and their owners in
a range of corporate matters with a particular
emphasis on mergers and acquisitions. His
other areas of expertise include employment
law and wills and estates.
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