Executives in a tense boardroom meeting, representing a director removal dispute and shareholder conflict in an Ontario or BC corporation

Removing a Director from a Corporation in Ontario and BC: How It Works and When Courts Will Intervene

Date: June 10, 2026

Removing a director from a corporation is one of the most consequential steps shareholders can take in a corporate dispute. Whether the director has breached their fiduciary duties, misappropriated assets, or simply lost the confidence of the shareholders, the process for removal depends on the governing statute, the corporation's own documents, and whether the director is willing to go.

This article explains how director removal works in Ontario and BC, when shareholders can act without court involvement, what grounds justify court intervention, how the oppression remedy and derivative action apply, and what to do when a director is entrenched and refuses to leave. For related guidance on breach of fiduciary duty claims against directors, see our dedicated practice page.

The short answer
Shareholders can remove a director by ordinary resolution at a properly convened shareholder meeting in both Ontario and BC. Where the director controls enough votes to block removal, or where misconduct justifies court intervention, legal remedies including the oppression remedy and derivative action are available.

The process is governed by the Ontario Business Corporations Act, BC's Business Corporations Act, or the Canada Business Corporations Act depending on how the corporation is incorporated. The corporation's articles, bylaws, and any shareholder agreement may also impose different or higher requirements. Check those documents before taking any steps.

The statutory framework: Ontario, BC, and federal

Ontario and federal

  • Ontario corporations: Business Corporations Act, RSO 1990, c B.16 (OBCA), s. 122
  • Federal corporations: Canada Business Corporations Act, RSC 1985, c C-44 (CBCA), s. 109
  • Ordinary resolution required unless articles or shareholder agreement specify otherwise
  • Oppression remedy: OBCA s. 248, CBCA s. 241
  • Derivative action: OBCA s. 246, CBCA s. 239
  • Court can order removal as part of oppression remedy relief

British Columbia

  • BC corporations: Business Corporations Act, SBC 2002, c 57 (BCBCA), s. 128
  • Ordinary resolution required unless articles specify otherwise
  • Oppression remedy: BCBCA s. 227
  • Derivative action: BCBCA s. 232
  • Director duties: BCBCA s. 142
  • BC Supreme Court hears applications for court-ordered removal

Removing a director by shareholder resolution

The primary mechanism for removing a director in both Ontario and BC is a shareholder resolution passed at a properly convened meeting. In Ontario, section 122 of the OBCA and section 109 of the CBCA permit shareholders to remove a director before the expiry of their term by ordinary resolution. In BC, section 128 of the Business Corporations Act provides the equivalent power.

An ordinary resolution requires a simple majority of votes cast by shareholders entitled to vote, unless the articles, bylaws, or shareholder agreement impose a higher threshold. Before relying on an ordinary majority, review the corporation's constating documents carefully: many closely held corporations include provisions requiring a supermajority or unanimous consent for director changes, which can make removal significantly more difficult.

The process requires a valid shareholder meeting with proper notice to all shareholders entitled to vote. In Ontario, a director subject to a removal resolution must be given notice and an opportunity to make representations to shareholders before the vote. Procedural deficiencies in convening the meeting or providing notice can render the resolution invalid and expose the corporation to further litigation.

Always check the shareholder agreement before convening a removal meeting. Many closely held corporation shareholder agreements include provisions that protect certain shareholders' rights to designate or maintain directors, require specific notice procedures for removal, or impose higher voting thresholds. Proceeding without checking these provisions can make the removal void and create additional claims against those who attempted it.

When shareholders cannot remove a director by resolution

Removal by ordinary resolution fails where the director being removed controls enough shares to defeat the vote. This situation is common in closely held corporations where the director is also a significant shareholder. In these cases, shareholders must consider whether the corporation's documents provide an alternative mechanism or whether legal proceedings are necessary.

A director who is also a majority shareholder can effectively entrench themselves in office by voting their shares against any removal resolution. Courts will not override this voting right simply because other shareholders are dissatisfied with the director's performance. Overcoming entrenchment requires either a provision in the shareholder agreement that overrides the voting right in specific circumstances, or evidence of conduct that meets the threshold for court intervention.

Grounds for court-ordered removal

Courts treat the removal of a director by court order as an extraordinary remedy. A judge will intervene only where the director's conduct clearly justifies it. Business judgment disputes, strategic disagreements, and personality conflicts do not meet the threshold. The following categories of conduct have been recognized as grounds for court intervention in Ontario and BC.

Fraud and misappropriation A director who has defrauded the corporation, misappropriated its assets, or diverted corporate funds for personal benefit has committed the most serious category of breach. Courts will order removal and may also grant other relief including orders to account for and return the misappropriated amounts.
Undisclosed conflicts of interest A director who enters into transactions that benefit themselves or related parties without disclosing the conflict and obtaining proper approval has breached their fiduciary duty. Where the conflict has caused harm to the corporation, court-ordered removal may be available as part of the remedy. See our guide to breach of fiduciary duty for the full framework.
Competing with the corporation A director who operates or assists a competing business without the corporation's consent is in breach of their duty of loyalty. This is one of the most common grounds for urgent court applications where ongoing harm to the corporation needs to be stopped quickly.
Oppressive conduct toward shareholders Where a director's conduct is oppressive, unfairly prejudicial, or unfairly disregards the interests of minority shareholders, the oppression remedy is available. Removal is one of the remedies courts can grant under this provision, either as a stand-alone order or alongside financial compensation and other relief.
Deliberate entrenchment and abuse of power A director who uses their position to prevent proper governance, block legitimate shareholder actions, or abuse the corporation's processes to maintain their position may be removed by court order where the conduct meets the threshold for oppression or breach of fiduciary duty.
Persistent breach of statutory duties Ongoing failure to comply with statutory obligations, including filing requirements, governance obligations, and financial reporting duties, can in serious cases provide grounds for court intervention where the breach is causing ongoing harm to the corporation or its shareholders.

The oppression remedy and derivative action: two paths to court-ordered removal

Where voluntary removal by resolution is not possible, shareholders in Ontario and BC have two primary legal mechanisms to pursue court-ordered removal: the oppression remedy and the derivative action. They address different harms and have different procedural requirements.

1

Oppression remedy (OBCA s. 248 / CBCA s. 241 / BCBCA s. 227)

The oppression remedy is brought by a shareholder on their own behalf to address conduct that is oppressive, unfairly prejudicial, or unfairly disregards their interests as a shareholder. It is the more commonly used remedy in closely held corporation director disputes because it directly addresses the shareholder's experience of unfair treatment. Courts have broad remedial powers under the oppression remedy including ordering removal, a buyout of shares, financial compensation, and injunctive relief. See our detailed guide on the oppression remedy in Ontario for how the test works.

2

Derivative action (OBCA s. 246 / CBCA s. 239 / BCBCA s. 232)

A derivative action is brought by a shareholder on behalf of the corporation to hold a director accountable for harm caused to the corporation itself rather than to the shareholder personally. It requires leave of the court before it can be commenced. Leave is granted where the shareholder has made reasonable efforts to have the corporation pursue the action itself, where the shareholder is acting in good faith, and where it appears to be in the corporation's interests to proceed. A successful derivative action can result in a director being ordered to account for and return misappropriated funds, damages to the corporation, and removal.

3

Urgent injunctive relief

Where a director's conduct is causing ongoing and irreparable harm to the corporation, shareholders can seek urgent injunctive relief to restrain the director's conduct while the main application is determined. This is particularly relevant where the director is actively diverting assets, competing with the corporation, or taking steps to entrench themselves further before the matter can be heard on its full merits. Urgent applications can be obtained quickly where the legal basis is clear and the harm is immediate.

Director refusing to leave after a shareholder resolution, or entrenched and blocking removal?

A director who controls enough votes to block removal, or who refuses to step down after a valid resolution, requires legal intervention. The longer the situation continues the more damage accumulates. Get advice on your options before the next board or shareholder meeting.

Call: 1-800-771-7882 Find Out How to Remove the Director

What happens after a director is removed

Removal of a director does not automatically resolve all the issues the removal was intended to address. Several practical steps are necessary immediately after removal to protect the corporation and prevent further harm.

  • Update signing authorities and bank access. Remove the former director's name from all bank accounts, signing authorities, and financial instruments immediately. A removed director who retains bank access can continue to cause financial harm after removal.
  • Revoke system and premises access. Cancel access to corporate email accounts, cloud storage, internal systems, and physical premises. A former director who retains access to confidential corporate information can use it against the corporation's interests.
  • File notice of director change. In Ontario, file a notice of change with the Ontario Business Registry. In BC, file a notice of change with the BC Registry Services. Failing to update the public registry means the former director may continue to appear as a director in public records, which creates further complications.
  • Address employment and officer status separately. A directorship is separate from employment and from officer roles such as president or secretary. Removal as a director does not automatically terminate employment or officer appointments. These must be addressed through separate processes and may involve severance obligations.
  • Assess ongoing legal claims. If the director's conduct before removal caused harm to the corporation or minority shareholders, claims for that harm survive the removal and can be pursued independently.

Trying to remove a director from a corporation in Ontario or BC and not sure which process applies?

The right approach depends on the governing statute, your corporation's documents, and whether the director is likely to cooperate. Get a clear assessment of your options before calling the meeting or filing anything.

Get Advice on Removing the Director Or call us: 1-800-771-7882

Practical takeaways

Shareholders can remove a director by ordinary resolution in Ontario under OBCA s. 122 and in BC under BCBCA s. 128, unless the corporation's articles or shareholder agreement require a higher threshold. Check those documents first.
A director who controls enough shares to defeat an ordinary resolution cannot be removed by vote alone. Court proceedings through the oppression remedy or derivative action are required where the director is entrenched.
Courts treat court-ordered removal as an extraordinary step requiring clear evidence of serious misconduct such as fraud, misappropriation, undisclosed conflicts of interest, or oppressive conduct. Business judgment disputes do not meet the threshold.
The oppression remedy addresses harm to shareholders personally; the derivative action addresses harm to the corporation. Both can result in removal as part of the relief granted. The appropriate path depends on the nature of the harm.
After removal, act immediately to revoke the former director's signing authority, bank access, system access, and premises access. File the required notice of change with the applicable registry. Address employment and officer status separately.
The shareholder agreement is often the most important document in a director removal dispute. It may contain provisions that facilitate or impede removal beyond what the statute provides. Review it before taking any steps.

Frequently asked questions

How do you remove a director from a corporation in Ontario?

In Ontario, shareholders can remove a director by ordinary resolution at a shareholder meeting under section 122 of the Ontario Business Corporations Act, unless the articles, bylaws, or shareholder agreement require a higher threshold. Where the director controls enough votes to block removal, shareholders may need to pursue an oppression remedy application or a derivative action through the courts.

How do you remove a director from a corporation in BC?

In BC, shareholders can remove a director by ordinary resolution under section 128 of the Business Corporations Act, SBC 2002, c 57, unless the articles require a higher threshold. Where the director is entrenched, BC shareholders can pursue an oppression remedy under section 227 or a derivative action under section 232 of the BC Business Corporations Act.

Can a court remove a director from a corporation?

Yes. Courts in Ontario and BC have jurisdiction to order removal of a director as part of an oppression remedy or derivative action. Court-ordered removal requires clear evidence of serious misconduct such as fraud, misappropriation, undisclosed conflicts of interest, or oppressive conduct. Courts will not remove a director simply because shareholders are unhappy with their business decisions.

What is the difference between an oppression remedy and a derivative action for director removal?

An oppression remedy is brought by a shareholder for conduct that is oppressive, unfairly prejudicial, or unfairly disregards their interests as a shareholder. A derivative action is brought by a shareholder on behalf of the corporation to hold a director accountable for harm caused to the corporation itself. Both can result in court-ordered removal, but they address different types of harm and have different procedural requirements including the need for leave of court before a derivative action can be commenced.

Can a director be removed if they are also a majority shareholder?

Yes, but it is more difficult. A director who is also a majority shareholder can block a removal resolution by voting their shares against it. In that situation, removal requires either a provision in the shareholder agreement that overrides the voting right, or a court order as part of an oppression remedy or derivative action where the director-shareholder's conduct meets the threshold for court intervention.

What happens after a director is removed from a corporation?

After removal, the director ceases to have authority to act on behalf of the corporation. Signing authorities, bank access, system access, and premises access should be revoked immediately. A notice of director change must be filed with the applicable registry. Employment and officer status are separate from the directorship and must be addressed through separate processes. Any claims for harm caused by the director before removal can be pursued independently.

Need to remove a director from a corporation in Ontario or BC? Tell us what's happening.

Whether you are a shareholder trying to remove a director who is entrenched or whose conduct has damaged the corporation, or a director facing a removal attempt you believe is improper, Achkar Law advises on shareholder disputes and corporate governance matters across Ontario and British Columbia. We will assess your position and advise on the most effective approach before the situation deteriorates further.

Call us at 1-800-771-7882 or fill out the form below and we will be in touch.