The Director Resignation Checklist | MinuteBox Cloud Entity Management

The Director Resignation Checklist

What to do when a company director is resigning

About this Guide

This checklist covers the steps to take when a director of a Canadian federal corporation is resigning. It includes the essential steps to prepare depending on whether you've already received the resignation or need to prepare it yourself.

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Last updated on March 15, 2022

The Director Resignation Checklist

What You'll Learn in This Guide

Over the life of a corporation it is almost a certainty that one or more directors will change. This can happen for many reasons, depending on the size and nature of the company. Directors may cease due to the end of a term arising or the governance of a company may be changing.

When a director is resigning and will no longer hold his or her position on the board, there are essential steps that must be taken to ensure the resignation is properly documented and affected.

Below you'll find the essential steps to take when a director of a company is resigning or ceasing to hold the position on the Board of Directors for any reason. Maintaining proper records around director resignations is essential for corporate governance compliance.

In this guide you'll learn the following

  • What to do if the director has already signed a resignation
  • What to do once all the resignation documents have been signed
  • What to do if you're asked to prepare director resignation documents
  • What to do with the minute book once you've completed the resignation

CHECKLIST FOR RESIGNATION OF A DIRECTOR - Federal Corporation

Basic details and instructions

Name of Corporation:

Date:

Your Initials:

Instructions received from (if applicable):

Name(s) of person(s) resigning:

Not Legal Advice: All content presented herein is for informational and demonstration purposes only. Nothing should be construed as legal advice. Do not act upon any information presented without seeking professional counsel!


Step A

IF DIRECTOR HAS ALREADY SIGNED RESIGNATION

  1. Check to see if the resignation creates a problem with meeting residency requirements. If so, notify lawyer or attorney immediately
  2. Find out if this resignation applies to any other related companies also
  3. Check effective date of resignation
  4. Find out if a replacement director is to be appointed at this time. If so, see checklist
  5. If company is reporting or piblic, check if director resigning is a member of the audit committee
  6. If so, advise lawyer and update Database to reflect cessation
  7. Check Corporation’s Articles for the Min/Max Number of Directors. Make sure you aren’t going under the minimum allowed. If so, get further instructions from lawyer and prepare special resolution and Articles of Amendment if necessary. * See § 112(2) of CBCA regarding effective date of amendment.
  8. Check minute book for any documents, etc. that are outstanding that may need to be signed by the resigning director
  9. If necessary, prepare directors' resolution appointing new member of audit committee. Check with lawyer to see if you should prepare resolution authorizing him/her to sign information notices on behalf of the corporation.
  10. Prepare Notice of Directors (for all jurisdictions)
  11. Update the corporate records or entity management database, such as MinuteBox
  12. Run a register of directors and file in records book. If you are using MinuteBox, the directors register is automatically updated
  13. Run a Corporate Information Summary and distribute as necessary. If you using MinuteBox your Corporate Information Summary is automatically updated and can be sent to all required parties
  14. Put copies of documents in the records book “out for execution.” When MinuteBox e-signature is being used, pages that are out for signature will automatically appear under "Out for Signature" and the status will appear for each entry. Documents will automatically return to the correct section once returned.
  15. Send docs to lawyer or prepare letter to Corporation for lawyer’s signature
  16. Check if director who is resigning is the contact person for the company - if so, see checklist and ask lawyer for new contact name
Step B

WHEN THE DOCUMENTS ARE RETURNED

  1. File Federal Notice of Directors electronically
  2. Print copy of filed electronic Notice and staple to originally signed Notice, file in the record book. If you are using a digital minute book, save the electronic record to the Forms Filed tab
  3. File Notice of Directors in other jurisdictions, if applicable
  4. Charge file for any applicable filing fees
  5. If lawyer has been authorized to sign information, make note in MinuteBox for future reference
Step C

if you ARE INSTRUCTED TO PREPARE RESIGNATION

  1. Check to see if the resignation will create a problem with meeting residency requirements. If so, notify lawyer immediately
  2. Find out if this resignation applies to any other related companies also
  3. Check if there is a specific future date for the resignation. If so, you can still enter the data into the database and the director will be noted as "outgoing". If there is some information that is still not confirmed then you can mark also mark the transaction as "Pending"
  4. Find out if a replacement director to be appointed at this time. If so, see checklist for appointment of director. If you only have partial information, like director name, but cannot yet confirm the appointment date, you may enter the details into MinuteBox and mark the transaction as "Pending"
  5. If company is reporting or public, check if director resigning is a member of the audit committee.
  6. If so, find out who will replace him or her
  7. Check Corporation’s Articles - Min/Max Number of Directors. Make sure you aren’t going under the minimum allowed. If so, get further instructions from lawyer and prepare special resolution and Articles of Amendment if necessary. * See § 112(2) of CBCA regarding effective date of amendment
  8. Check minute book and file for any documents, etc. that are outstanding that may need to be signed by the resigning director
  9. Update database to show director as “Outgoing.” If using MinuteBox, the director status will automatically update to "Outgoing" once a "Ceased" date is entered
  10. If necessary, prepare directors’ resolution appointing new member of audit committee. Check with lawyer to see if you should prepare a resolution authorizing him or her to sign information notices on behalf of the corporation
  11. Prepare the resignation (via database)
  12. Prepare Notice of Directors for all jurisdictions (via database)
  13. Put copies of documents in the records book “out for execution”
  14. Send the documents to lawyer or prepare letter to Corporation for lawyer’s signature. Check if director who is resigning is the contact person for the company - if so, see checklist and ask lawyer for new contact name.
Step D

When executed documents are returned

  1. Check effective date of resignation
  2. File Federal Notice of Directors electronically
  3. Print copy of filed electronic Notice and staple to originally signed Notice, file in the minute book, unless you are using a cloud minute book system. If so, upload the Notice receipt to the minute book
  4. File Notice of Directors in other jurisdictions, if applicable
  5. Charge file for any applicable filing fees
  6. If lawyer has been authorized to sign information, make note in MinuteBox for future reference
  7. Update Database to reflect resignation
  8. Run a register of directors (via database) and file in records book
  9. Run a Corporate Information Summary, proofread, and distribute as necessary or share access to the cloud database with the required parties
REMEMBER TO UPDATE RECORD THAT YOU HAVE RETURNED THE FILE IF YOU ARE USING PHYSICAL DOCUMENTS!
  • Sec. 108(2) a resignation of a director becomes effective at the time a written resignation is sent to the corporation, or at the time specified in the resignation, whichever is later
  • Sec. 105(3) (subject to subsection 3.1) at least 25% of the directors must be resident Canadians
  • Sec. 102(2) a distributing Corporation, any of the issued securities of which remain outstanding and are held by more than one person, must have a minimum of 3 directors, at least two of whom are not officers or employees of the corporation or its affiliates
  • Sec. 102(2) a private Corporation must have a minimum of 1 director

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