The SCC Reconsiders Shareholder Oppression Under The CBCA

In Mennillo v. Intramodal inc.¹, the Supreme Court of Canada considered whether a corporation's non-compliance with the corporate formalities of the Canada Business Corporations Act (" CBCA") can constitute shareholder oppression.

The claimant, Mr. Mennillo and his associate Mr. Rosati were together the sole shareholders and directors of Intramodal, a small privately run company. Upon Mennillo's resignation as officer and director in May 2005, Intramodal filed an amending declaration with the corporate registry removing him as a director and as a shareholder. The corporation, however, did not follow the legal formalities under the CBCA before registering the share transfer to Rosati. Notably, Mennillo did not properly endorse or deliver the transferred shares.