Increasing or Decreasing the Number of Directors on an Ontario Corporation's Board

A corporation's articles of incorporation don't just fix its name and share structure — they also set out how many directors it's allowed to have, whether as a fixed number or a minimum-to-maximum range. As a business grows, brings in investors, or sees a founder step off the board, that number often needs to change. Doing it properly means going back to the same document that set it in the first place.

Here's the process for increasing or decreasing an Ontario corporation's authorized number of directors, and a few points that trip people up.

Where the Number of Directors Comes From

Your corporation's articles specify the number of directors either as a fixed number, such as "three directors," or as a range, such as "a minimum of one and a maximum of ten directors." If your articles set a range, the directors themselves can often set the actual number within that range without amending the articles at all — check the articles and bylaws first, because this can save an unnecessary filing.

If you need to go outside the existing fixed number or range, the articles themselves need to be formally amended.

Reducing the Number Doesn't Automatically Remove Anyone

Lowering the maximum number of directors your articles allow doesn't, by itself, remove any director currently serving. If the corporation actually has more directors in office than the new lower number permits, those specific individuals still need to be dealt with separately — through resignation, a shareholder vote to remove them, or simply not re-electing them at the next annual meeting.

The Process, Step by Step

1. Confirm what your current articles say. Pull the actual articles of incorporation, and any prior articles of amendment, from the minute book — don't rely on memory of what was originally filed.
2. Draft the special resolution. Changing the number of directors set out in the articles requires shareholder approval by special resolution, not just a director-level decision.
3. Hold the shareholder vote, or use a written resolution. As with other shareholder decisions, a written resolution signed by all voting shareholders can substitute for an actual meeting.
4. File articles of amendment with the Ontario Business Registry. A filing fee applies — check the current fee before you file, since government filing fees are periodically adjusted.
5. Update the corporate minute book. Record the new articles of amendment and the special resolution, and update the register of directors once the new number takes effect and any new directors are appointed or existing ones step down.

A Note for Federally Incorporated (CBCA) Corporations

If your corporation is incorporated federally under the CBCA rather than provincially under the OBCA, there's an extra wrinkle worth knowing about before you add directors: the CBCA generally requires that at least 25% of the corporation's directors be resident Canadians, or at least one director if the board has fewer than four. This doesn't apply to an OBCA corporation — Ontario has dropped its resident-director requirement, so an Ontario corporation can have an all-non-resident board. For a foreign-owned business deciding how to add directors, this difference between the two regimes is worth factoring in before you pick names for new board seats.

Common Reasons to Change the Number

• Bringing in an investor who negotiated a board seat as part of a financing round
• A founder stepping back from day-to-day involvement and leaving the board
• Simplifying governance in a small corporation down to a single director
• Formalizing a board structure ahead of a sale process or outside financing, where buyers or lenders expect a properly constituted board

Frequently asked questions