CANADA Law and Practice Contributed by: Sarah Gingrich, Sean Stevens, Marie-Josée Neveu and Tracy Hooey, Fasken
shareholders is also required to effect various fundamental changes. These generally include (i) amendments to the company’s articles or by- laws, (ii) transactions involving substantially all of the company’s assets or property, (iii) a merger (referred to as an “amalgamation” in Canada) of the company with another company, (iv) a migra - tion or “continuation” of the company under another governing corporations statute, and (v) dissolution of the company. Beyond the foregoing, shareholders of Canadian companies may also be entitled to (i) make a shareholder proposal, and (ii) requisition a share - holder meeting. Regarding shareholder proposals, these can generally be made by a shareholder owning a minimum 1% interest and require that the com - pany include the proposal in a management proxy circular being distributed by the company. The proposal and its supporting statement can - not exceed 500 words. Shareholder proposals in Canada are typically made in connection with a company’s AGM. Note, however, that where the shareholder proposal relates to the election of one or more directors, a minimum 5% interest is generally needed. Regarding requisitioning a shareholder meeting, this can be done by one or more shareholders owning a minimum 5% interest. This is most commonly done by shareholder activists as part of a proxy campaign to elect a dissident slate of directors. Requisitioning a shareholder meeting requires strategic planning and care - ful compliance with various technical require - ments. Also, even where a shareholder meet - ing has been requisitioned, it is not uncommon for Canadian courts to allow the subject matter of the requisitioned meeting to be deferred to
the next scheduled shareholder meeting (ie, the company’s AGM). While shareholders in Canadian companies do not benefit from approval rights regarding the vast majority of the company’s business deci - sions, practically speaking a dialogue often occurs between public companies and their largest investors. In Canada, this is particularly so regarding public companies and their insti - tutional shareholders (eg, pension funds). This reflects the fact that Canadian institutional inves - tors often own (either individually or in groups) large blocks of shares in Canadian public com - panies. This can give the institutional investor(s) outsized influence on the company compared to other jurisdictions where public companies may be more widely held than many public compa - nies in Canada. See also 1.2 Sources of Corpo- rate Governance Requirements . 5.3 Shareholder Meetings Canadian companies are required to hold an AGM. This must occur not later than 15 months following the last AGM or six months following the company’s most recent financial year. AGMs and other shareholder meetings are conducted in accordance with the company’s by-laws. The principal business conducted at AGMs in Canada is (i) the election of the company’s board of directors, (ii) presentation of the com - pany’s financial statements and the report of the company’s auditors on the financial statements, and (iii) the appointment of the company audi - tor. “special meeting” is a meeting called for the purpose of conducting business other than the foregoing – eg, a meeting requisitioned by an activist shareholder. Although shareholders of Canadian public com - panies are entitled to attend AGMs in person,
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