What court approval is needed for a plan of arrangement involving an Ontario corporation?

An Ontario corporation seeking a plan of arrangement applies to the Superior Court of Justice for an order approving it under the Business Corporations Act. Before the court will grant approval, it generally wants to see that the arrangement is being proposed in good faith, that it's fair and reasonable to the people affected by it, and that shareholders have been given proper notice and a genuine opportunity to be heard — often including an interim court order setting out how notice and any shareholder meeting will be conducted before the final approval hearing.

Where the arrangement affects minority shareholders differently from others, such as in a going-private transaction, courts pay particular attention to fairness, and evidence like an independent fairness opinion is commonly put before the court to support the "fair and reasonable" finding, even though it isn't the only way to satisfy the court. Once granted, the court's final order and the arrangement bind the corporation and its shareholders, including any who voted against it, subject to whatever dissent rights apply.

Because the standard involves both a corporate law and a fairness assessment, arrangements are prepared with detailed materials for the court, and timelines vary case by case, so build in room for this step.