Quorum for holding a meeting of the board of directors

In order for the board of directors to validly deliberate and make decisions, the declarations of co-ownership generally provide that a minimum number of directors must participate to the meeting. This requirement is called the quorum.

Quorum determination

Unlike the situation prevailing at the general meeting of the co-owners, the Civil Code of Québec does not provide any specific rule regarding quorum determination. It is the By-laws of the immovable which establishes the rules relating to the operation of the board of directors and, thus, those relating to the quorum.

Quorum in number

Since the law does not set a minimum quorum threshold, its provisions are left to the declarant’s discretion. The general meeting of the co-owners may subsequently amend the declaration of co-ownership to specify other rules.

Although a single director may constitute a quorum, in practice it is formed by the majority of the members of the board of directors. For example, if the board of directors comprises five directors, the quorum will be three.

Proxy

The director’s office is a function entrusted in a personal capacity. A proxy cannot be given by a member of the board of directors to act on his behalf at a meeting. Thus, a director cannot give the power to one of his colleagues or to a co-owner to act in his place and stead and thereby allow the quorum to be reached.

Virtual meeting

It is not uncommon that directors are not available to attend board meetings. Virtual meetings are expected to become commonplace, thereby reducing traveling. Article 344 of the Civil Code of Québec stipulates in this respect, that if all the directors agree, they may, participate in a meeting of the board of directors by the use of a means which allows all those participating to communicate directly with each other. The Minister of Justice's comments provide the example of a conference call. Thus, the physical presence of directors at the meeting is not necessarily required to reach a quorum.

Quorum determination

At the opening of the meeting, it is up to the president of the board of directors to ensure, inter alia, that the quorum in the by-laws of the immovable is attained. If quorum is reached at the time the meeting is convened, or before the expiry of the grace period set in the declaration of co-ownership (e.g. within 30 minutes of the stated time for the start of the meeting ), it can be held . The board of directors will thus be able to take, validly, any decision relative to a question on the agenda.

In principle, the quorum must be maintained throughout the duration of the meeting. A loss of quorum may occur following the departure of one or more directors. The president of the board of directors will have to adjourn the meeting immediately and a new notice of meeting will need to be sent to each member. The minutes will indicate the time of the adjournment and the names of the members of the board of directors present.

Exception

There is an exception to the principle that the board of directors cannot deliberate and make decisions without a quorum. Article 340 of the Civil Code of Québec states that when directors must fill a vacancy on the board of directors, they may validly convene the members even if their number is less than the quorum.

 

 WHAT YOU SHOULD KNOW ! The rules to satisfy quorum to hold a meeting of the board of directors are different from the rules governing general meetings of the co-owners. It is the by-laws of the immovable that determine them.

WHAT TO KEEP IN MIND :  Article 344 of the Civil Code of Québec provides that, if all the directors are in agreement, they may participate in a meeting of the board of directors by the use of a means which allows all those directors participating to communicate directly with each other. Therefore, the physical presence of all directors is not necessarily required to reach a quorum.

WARNING ! The loss of quorum at a meeting of the board of directors does not affect the validity of the decisions made prior to that determination, but renders the adoption of any other resolution impossible. Thus, any decision adopted without the required quorum may be annulled.

 CONSULT THE PUBLICATION: Guide de procédure et de fonctionnement des assemblées des co-propriétaires (Procedure and Operation of Co-owners Meetings Guide).

 

Back to the mega-factsheet Board of Directors