Virtual Directors' Meetings in Ontario Corporations: Are They Valid?

Small business owners often run their corporation's affairs informally — a phone call here, a group text there, a quick video call when a decision needs to be made. It's a fair question whether any of that actually counts as a valid directors' meeting under Ontario corporate law, or whether the directors need to be in the same room to make binding decisions.

The short answer is that Ontario law is generally accommodating of virtual participation, but there are conditions worth understanding — and habits worth building — so that decisions made outside a boardroom hold up if they're ever questioned later.

Short Answer: Yes, With Conditions

Ontario's Business Corporations Act generally permits directors to participate in a meeting by telephone, video conference, or another communication facility that allows all participants to communicate with each other adequately during the meeting, unless the corporation's articles or by-laws say otherwise. In practice, this means a properly conducted phone or video meeting of directors is treated the same as an in-person one, provided everyone can actually hear and take part in the discussion.

The key conditions are:

• Everyone can communicate with everyone else. A method where some directors can't hear or respond to others in real time falls short of what the law contemplates.
• The articles or by-laws don't prohibit it. Some older or more conservative corporate documents specify in-person meetings only — worth checking before assuming virtual participation is automatically fine.
• Quorum and notice requirements still apply. A virtual meeting still needs enough directors participating to meet quorum, and proper notice of the meeting still needs to go out, exactly as it would for an in-person meeting.

This flexibility is particularly useful for corporations whose directors are spread across different cities, provinces, or even countries — a scenario that is increasingly common as businesses grow beyond a single owner-operator. It also means a director travelling for work, or dealing with a family or health issue, doesn't need to miss a meeting entirely, provided they can still meaningfully take part by phone or video.

Written Resolutions: An Alternative to Meeting at All

Many small corporations skip the idea of a "meeting" altogether for routine decisions and instead use a written resolution signed by all the directors, which Ontario corporate law generally treats as equally valid to a resolution passed at a meeting — provided all directors entitled to vote on the matter actually sign it. This is often the simplest way to formally document a decision the directors already agree on, without needing to coordinate calendars for a call.

A written resolution works well for routine matters (approving a contract, appointing an officer, declaring a dividend) but is less suited to situations involving real disagreement or discussion among directors, where an actual meeting — virtual or in person — is the more appropriate format.

Best Practices for Documenting a Virtual Meeting

Whether by phone, video, or a mix of both, the minutes should capture enough detail that anyone reviewing the corporation's records later — an auditor, a lender, a buyer's lawyer — can confirm the meeting was properly held:

• [ ] Note the method of participation (e.g., video conference) in the minutes
• [ ] Confirm and record that quorum was met
• [ ] Record which directors participated and by what means
• [ ] Confirm notice of the meeting was properly given (or waived, if permitted)
• [ ] Have the minutes signed and retained in the corporation's minute book
• [ ] Keep any resolutions passed at the meeting alongside the minutes

Skipping this documentation is a common shortcut — and one that tends to surface as a gap during due diligence for financing or a sale, when a buyer's or lender's counsel is reviewing the corporation's governance history.

When to Update Your By-laws

If your corporation's by-laws were drafted years ago and don't clearly address electronic participation, or if they require in-person meetings without qualification, it's worth having them reviewed and updated. This is a relatively minor amendment compared to some other corporate housekeeping, but it removes any doubt about whether a virtual meeting is valid going forward — especially useful for corporations with directors in different cities or provinces.

Frequently asked questions