Shareholder Agreements - The Law Society of Saskatchewan

Corporate Commercial Section 6
Shareholder Agreements
2009 © The Law Society of Saskatchewan
This section could have the effect of imposing on shareholders (to
the extent that powers have been removed from the directors)
those duties otherwise imposed or which could be imposed on
directors of a corporation under other provincial laws (such as the
Employment Standards Code, R.S.A. 2000, c. E-9 and Workers'
Compensation Act, R.S.A. 2000, c. W-15).
Section 140(4) of the SBCA not only imposes on shareholders all
duties and liabilities otherwise the responsibility of directors (to
the extent that the USA provides). It also grants to a shareholder
all the rights and powers of those directors. In light of sections
113, 114 and 118 of the SBCA, it is important that a shareholder
of the corporation wishing to dissent from any action taken by
other shareholders of the corporation, do so, and take such steps
as are necessary to record that he or she did not consent to the
resolution or action in question.
Section 104 of the SBCA provides that directors can be removed
by ordinary resolution of shareholders, but a USA may vary this
requirement.
Power to Borrow and Give Security
Particular provisions of the SBCA give directors the power to
borrow and give security (subject to the USA):
97(1) Subject to any unanimous shareholder agreement,
the directors of a corporation shall:
(a) exercise the powers of the corporation directly or
indirectly through the employees and agents of the
corporation; and
(b) direct the management of the business and affairs
of the corporation.
98(1) Unless the articles, bylaws or a unanimous
shareholder agreement otherwise provide, the directors
may, by resolution make, amend, or repeal any bylaws
that regulate the business or affairs of the corporation.
16(1) It is not necessary for a bylaw to be passed in order
to confer any particular power on the corporation or its
directors.
183(1) Unless the articles or bylaws of, or a
unanimous shareholder agreement relating to, a
corporation otherwise provides, the articles of a
corporation are deemed to state that the directors of a
corporation may, without authorization of the shareholders:
(a) borrow money upon the credit of the corporation;
Corporate–6–4
Saskatchewan CPLED Program