Proxies, private companies and The BC Business Corporations Act

Proxies are a mechanism for a shareholder to grant to another person the ability to attend and vote on their behalf at shareholders’ meetings of a corporation. The business corporations statutes of Canada and most provinces, contain a regulatory framework governing the granting and use of proxies. British Columbia is one of the few Canadian provinces whose corporations’ legislation is silent on the subject of proxies.

This means that the form, use and content of proxies at meetings of shareholders of B.C. companies is entirely governed by the articles of each unique company. While most companies set out a framework for proxies in their corporate articles, what happens when a company’s articles are silent?

While Robert’s Rules of Order is an excellent starting point for non-binding interpretive assistance, since proxies are creatures of statute and not the common law, if the legislation and the articles of a company are silent on their permissibility, shareholders do not have the inherent right to vote by proxy.

As already mentioned, while it is rare that proxies are not provided for to some degree in a company’s articles, it is fairly common to find corporate articles that do not indicate the form and effect of such proxies, despite allowing their use by shareholders. In such instances, once again while Robert’s Rules of Order is an excellent starting point, unless they have been adopted by reference in the company’s articles, disputes relating to proxies will be determined by the chair of a particular meeting.

Note that rulings by a chair regarding proxies and their validity or use at a meeting of shareholders may be the subject of a subsequent court challenge. In such cases, the court may exercise its discretion under s. 186 of the B.C. Business Corporations Act to remedy any deficiency in the chair’s actions or in the conduct of the meeting – see Pala Investments Holdings Limited v. Bristow, 2009 BCSC 680.

If you have any questions about proxies, shareholder meetings or oppressive conduct, please contact one of our corporate / commercial lawyers http://www.ahbl.ca/practices/practice-areas/corporate-commercial-practice-group/.