The judicial construction of this phrase has been the subject of several significant cases in the courts, and most notably at the Judicial Committee of the Privy Council: The first Federal and Provincial Acts generally provided for incorporation through letters patent, but the procedure was excluded federally for certain classes of company (such as railways and banks), which still had to be incorporated by special Act of Parliament.
Current Acts (such as the Canada Business Corporations Act) generally provide for formation by articles of incorporation, but Prince Edward Island still retains the letters patent procedure and Nova Scotia provides for incorporation by memorandum of association.
Corporations Canada is responsible for the administering the following laws:[7] The articles of incorporation can provide for different classes of shares[8] (which may carry the right to elect separate directors).
Some case law exists where decisions about remuneration were not reached fairly, or where directors' fees are unusually high, thus attracting oppression remedy claims under the various corporate statutes.
The same strict standard as in the UK applies to this day, so even having a close friendship with someone that benefits from a company contract counts.
[42]In addition to being initiated by the corporation, litigation can be exercised through either derivative actions or the oppression remedy (the latter available federally and in all provinces other than Prince Edward Island).
[50] Derivative actions may be pursued by a complainant if: Canadian legislation provides for a broad approach to the oppression remedy.
The oppression remedy of s. 241(2)(c) of the CBCA and the similar provisions of provincial legislation regarding corporations grant the broadest rights to creditors of any common law jurisdiction.
"[53] In BCE Inc. v. 1976 Debentureholders, the Supreme Court of Canada stated that, in assessing a claim of oppression, a court must answer two questions:[54] Where conflicting interests arise, it falls to the directors of the corporation to resolve them in accordance with their fiduciary duty to act in the best interests of the corporation.
[42] Following BCE, the Court of Appeal of British Columbia noted that "breach of fiduciary duty ... 'may assist in characterizing particular conduct as tending as well to be 'oppressive', 'unfair', or 'prejudicial'".
[56] More recently, scholarly literature has clarified the connection between the oppression remedy and the fiduciary duty in Canadian law: 84.
Establishing a breach of the tripartite fiduciary duty has the effect of raising a presumption of conduct contrary to the reasonable expectations of a complainant.
Rules governing takeover bids come from various sources: Relatively little litigation has taken place in this matter in the Canadian courts.
[74] The Canadian Securities Administrators issued proposals in 2013 on tightening early warning requirements in their rules,[75] while in Quebec the Autorité des marchés financiers issued a proposal favouring an alternative approach concerning all take-over bid defensive tactics.
[76] Canadian corporate law offers a variety of options in which to conduct reorganizations, depending on whether the context concerns mergers and acquisitions or insolvency.
It is a fact that the corporation is permitted to alter individual rights that places the matter beyond the power of the directors and creates the need for shareholder and court approval.
The fact that a group whose legal rights are left intact faces a reduction in the trading value of its securities generally does not constitute a circumstance where non‑legal interests should be considered on an application for an arrangement.