Match-up: s 137 of the BCBCA vs s 146 of the CBCA

The BCBCA does not recognize Unanimous Shareholder Agreements (USA), and instead includes s 137(1) and (2). While both models allow for flexibility in the architecture of the corporation, the wording of the BCBCA provision provides some interesting differences compared to the USA provision that is found in the CBCA (s 146). For one, the provision allows for the powers of the directors to manage and supervise to be transferred to any person. This is in contrast to the s 146, which describes transfers from directors to parties of the USA [s 146(5)]. Thus, the CBCA provision appears to entrench the notion of the primacy of the shareholder, whereas the BCBCA provision appears to be more flexible. Additionally, s 146 demands that the agreement be unanimous; whereas the transfer of powers under s 137 of the BCBCA would presumably take place according to the requirements of s 259 (1) of the BCBCA (“Alteration to articles”). If a transfer of power occurred without an amendment to the company articles (under the BCBCA) or without a USA (under the CBCA), the provision would presumably not take effect, and the rights, duties and liabilities would remain with the directors. One further possible takeaway? In both cases, the provisions allow shareholders to encroach on the powers of management of the directors, and thus assume more control in the day-to-day operations. This would appear to frustrate the traditional view of shareholders’ “arms-length” authority over the corporation.