Auditor Waiver: A Requirement Too Often Overlooked

The business corporations acts confer a clear right on shareholders to receive audited financial statements annually, unless they have expressly waived this right. In practice, however, this requirement is too often overlooked, and non-compliance may constitute a particularly serious form of oppression. 

Audited Financial Statements: A Clear Right 

Both the Business Corporations Act (the “QBCA”) and the Canada Business Corporations Act (the “CBCA”) require the board of directors of a corporation to present financial statements to shareholders at every annual meeting. These financial statements must include at least a balance sheet and an income statement. 

In principle, shareholders must also appoint an auditor at each annual meeting. The auditor then audits the corporation’s financial statements and submits its report to the shareholders at the same time as the board of directors present the financial statements at every annual meeting.