Waiver of notice

How BC law treats it

The Business Corporations Act, SBC 2002, c 57 (BCBCA) requires a company to give shareholders notice of a general meeting within set time limits, at least 21 days before the meeting for a public company and 10 days for any other company, and not more than 2 months before (s. 169 and the regulations). Under s. 170, a shareholder or other person entitled to notice may waive it or agree to a shorter period, and the waiver need not be in writing. Under s. 170, attending a meeting is a waiver of notice. The exception is a person who attends for the express purpose of objecting to the transaction of business on the ground that the meeting was not lawfully called. Where all shareholders are present and agree, the meeting can proceed despite short notice. Director meetings are governed mainly by the articles. Standard BC articles let directors call meetings on reasonable notice and allow a director to waive notice of past or future meetings. Directors can also avoid notice issues by passing consent resolutions in writing signed by all directors entitled to vote. Waiver of notice in corporate meetings is different from employment notice. Under the Employment Standards Act, RSBC 1996, c 113, s. 4, an agreement to waive the Act's minimum requirements, including compensation for length of service on termination, has no effect.

What it means for your business

Small private companies often need to act quickly on a financing, sale or banking resolution. Getting signed waivers of notice from all shareholders or directors lets a meeting go ahead on short notice without risking a later challenge. A written waiver in the minute book is better than relying on attendance alone, especially if relationships may sour. In a shareholder dispute, a meeting held on defective notice without valid waivers can be set aside. Example: A North Vancouver private company needs shareholder approval to sign a loan within three days. All four shareholders sign a waiver of notice and consent to short notice, and the meeting proceeds the next morning by video.

Risks and common mistakes

Holding a meeting on short notice without getting waivers from every shareholder entitled to notice. Relying on attendance as a waiver when a shareholder attended only to object to the meeting. Failing to file signed waivers in the minute book. Assuming an employee can waive statutory termination entitlements under the Employment Standards Act. Using a meeting with waived notice when a written consent resolution would have been simpler.