Canada Business Corporations Act (CBCA)

Definition

The Canada Business Corporations Act (CBCA) is a federal statute that governs the incorporation, organization, and regulation of corporations in Canada at the federal level. 

What is the Canada Business Corporations Act?

The CBCA sets out the requirements and procedures for incorporating a corporation in Canada. This includes the preparation and filing of articles of incorporation, which outline the corporation’s name, registered office, share structure, and other key details.

Furthermore, the CBCA provides rules for the issuance, transfer, and redemption of shares by corporations. It governs the rights and obligations of shareholders, including their entitlement to dividends, voting rights, and participation in the management of the corporation.

The CBCA also requires corporations to maintain accurate financial records and to prepare and distribute financial statements to shareholders and other stakeholders. It also establishes requirements for auditing and the appointment of auditors to review the corporation’s financial affairs.

Additionally, the CBCA regulates various corporate transactions, such as mergers, acquisitions and reorganizations. It sets out procedures and requirements for obtaining shareholder approval and filing notices with regulatory authorities for such transactions.

Lastly, the CBCA includes provisions aimed at promoting transparency, accountability, and fairness in corporate governance. It sets standards for directors’ conduct, disclosure of conflicts of interest, and protection of minority shareholders’ rights.