If you run a corporation in Ontario or federally under the Canada Business Corporations Act (CBCA), understanding the difference between a director vs shareholder resolution Ontario Canada requirements is more than just legal trivia—it’s fundamental to running your business properly. These two types of resolutions serve as tools to document and authorize major decisions. Each plays a distinct role in corporate governance. Knowing when and how to use them can help you avoid costly errors, stay compliant, and maintain a clean minute book.

In this article, we’ll explain what each type of resolution does, how it’s passed, and when it’s required. Whether you’re a startup founder, small business owner, or corporate advisor, this guide will help you navigate corporate decision-making with confidence and clarity.

What Is a Resolution in Corporate Law?

A resolution refers to a formal decision that either the board of directors or the shareholders of a corporation make. Corporations must document these decisions in writing and maintain them in the minute book. Typically, a resolution is passed at a meeting or signed by all eligible voters as a written resolution.

Corporations rely on two primary types of resolutions:

• Director resolutions (also known as board resolutions)
• Shareholder resolutions

Each serves a unique purpose depending on the nature of the decision being approved.

Director vs Shareholder Resolution Ontario Canada: What Is a Director’s Resolution?

A director’s resolution documents a decision made by the board of directors. The board oversees corporate operations and holds the authority to approve many business activities. Since directors are elected by shareholders, they act on the corporation’s behalf in most routine matters.

Common Uses of Director Resolutions:

• Appointing officers (e.g., CEO, CFO, Secretary)
• Approving financial statements
• Authorizing contracts, bank accounts, or loans
• Declaring dividends (if permitted)
• Approving share issuances (unless restricted)
• Filing government forms (e.g., corporate name or address changes)

Tip:

When issuing shares or opening a business bank account, banks often require a certified board resolution to proceed.

Director vs Shareholder Resolution Ontario Canada: What Is a Shareholder Resolution?

A shareholder resolution records a decision made by the owners (shareholders) of the corporation. Unlike directors, shareholders do not handle daily operations. However, they retain decision-making power over fundamental changes that affect ownership and governance.

Common Uses of Shareholder Resolutions:

• Electing or removing directors
• Amending articles of incorporation
• Adopting or amending by-laws
• Selling all or most of the company’s assets
• Approving mergers or corporate reorganizations
• Entering into unanimous shareholder agreements (USAs)
• Changing the share capital structure

In many cases, shareholder resolutions require a special resolution, which means at least two-thirds approval, rather than a simple majority.

Director vs Shareholder Resolution Ontario Canada: What’s the Difference?

Feature	Director Resolution	Shareholder Resolution
Who Passes It	Board of Directors	Shareholders
Main Focus	Business operations, management	Ownership, structure, strategy
Approval Required	Majority of directors	Majority or two-thirds (special resolution)
Examples	Approve contracts, hire officers, issue shares	Elect directors, amend articles, sell business
Recorded In	Director resolutions or meeting minutes	Shareholder resolutions or minutes
When Needed	Operational decisions	Strategic or ownership-related decisions

How Are Resolutions Passed in Practice?

Corporations pass resolutions in one of two ways:

• At meetings, where votes are cast during formal gatherings
• By written resolution, often used by private corporations for convenience

Startups and small businesses usually prefer written resolutions, especially when directors or shareholders are few and aligned in their decisions.

Example:

“BE IT RESOLVED THAT the Corporation approve the opening of a business bank account at [Bank Name] and that [Officer Name] be authorized to act as signing officer.”

Why Resolutions Matter

• They formalize legal authority. Financial institutions and regulators often request certified resolutions.
• They protect decision-makers. In disputes, documented resolutions support informed consent and diligence.
• They ensure compliance. Both OBCA and CBCA require up-to-date records, including resolutions.
• They support transactions. Buyers, lawyers, and investors review past resolutions in deals and audits.

Common Mistakes to Avoid

• Failing to record decisions in writing
• Using the wrong type of resolution (e.g., director instead of shareholder)
• Not updating registers when officer/shareholder changes occur
• Ignoring limitations in your shareholder agreement or USA

Best Practices for Small Businesses

• Use templates for both types of resolutions
• Maintain a clean, up-to-date minute book
• Get legal advice before major transactions or share changes
• Adopt annual resolutions to stay compliant
• Ensure resolutions are signed and securely stored

Conclusion

Knowing the difference between director and shareholder resolutions is key to responsible corporate governance. Directors oversee daily operations, while shareholders decide on structural and ownership matters. Choosing the right type of resolution, documenting it properly, and staying organized can help your business avoid costly issues and stay on track.

At Blueprint Law, we help startups and business owners keep their records in order. If you need help preparing resolutions or reviewing your minute book, reach out today to learn more about our fixed-fee governance services.