How Do You Remove a Director from a Canadian Charity?

Directors play a crucial role in the governance of a charity in Canada. However, there may come a time when a director needs to be removed due to conflicts, misconduct, or failure to fulfill their duties. 

Removing a director involves a structured legal process to ensure compliance with federal or provincial laws, particularly under the Canada Not-for-profit Corporations Act (CNCA) or the Ontario Not-for-Profit Corporations Act (ONCA) if the charity is based in Ontario.

This guide explains the complete process, from identifying valid grounds for removal to handling regulatory requirements. It also outlines practical steps to protect your charity during board transitions.

Reasons for Removing a Director

A director may be removed for several reasons, including:

• Breach of fiduciary duty – Engaging in misconduct, conflicts of interest, or unethical behavior.
• Failure to attend meetings – Consistently missing board meetings without valid reasons.
• Non-compliance with governing documents – Failing to adhere to the charity’s bylaws or legal obligations.
• Conflict of interest – Situations where personal or financial interests interfere with the charity’s best interests.
• Loss of confidence – If board members believe the director is not acting in the charity’s best interest.

Reviewing the Charity’s Governing Documents

Before initiating removal, review the charity’s bylaws and articles of incorporation to determine:

• Whether there are specific provisions for director removal.
• The required vote threshold for removal (majority or two-thirds vote).
• Any notice requirements for board or member meetings.

Legal Authority and Who Can Remove a Director

The authority to remove a director depends on the governing legislation and the organization's bylaws. Both members and boards may have removal powers, but statutory frameworks determine the specific procedures.

Statutory Governance: Federal and Provincial Overview

Canadian charities operate under either federal or provincial incorporation laws. Federal charities follow the Canada Not-for-profit Corporations Act (CNCA), which gives members the primary authority to remove directors through ordinary resolution.

Provincial charities must comply with their respective provincial acts. Each province has different requirements for director removal.

The governing statute determines who can initiate removal, required voting thresholds, notice periods for meetings, and documentation requirements.

Most statutes require that removal happens at properly called member or board meetings. We must follow the procedures outlined in the applicable act to ensure legal compliance.

Authority of Members versus the Board

Members typically hold the ultimate authority to remove directors in most Canadian charity structures. Members can remove any director through an ordinary resolution at a special meeting.

Boards generally cannot remove fellow directors unless specifically authorized by the charity's bylaws. The board's role is usually limited to making recommendations to members.

Key distinctions include:

Some nonprofit organizations grant boards limited removal powers in their bylaws. Statutory law usually prevails when conflicts arise between bylaw provisions and legislation.

Impact of ONCA and Other Legislation

The Ontario Not-for-Profit Corporations Act (ONCA) changed director removal procedures for Ontario charities. ONCA requires that members vote on director removal at properly convened meetings.

ONCA mandates specific notice periods for member meetings discussing director removal. We must provide at least 10 days' notice to all voting members.

Other provincial acts have similar requirements. Notice periods, voting thresholds, and resolution types may differ by province.

• Notice periods vary by province
• Some require special resolutions instead of ordinary resolutions
• Voting thresholds may differ

Directors removed under these acts lose their authority immediately after the resolution passes. The charity must update corporate records and file required government forms promptly.

We must review both the governing statute and organizational bylaws to determine the exact removal procedures for each charity.

Grounds and Triggers for Director Removal

Directors can be removed through specific processes outlined in the charity's governing documents. The authority and procedures vary depending on whether removal is initiated by bylaw provisions, member resolutions, or board decisions.

Bylaw Provisions and Articles of Incorporation

We must first examine the charity's bylaws and articles of incorporation to understand the specific grounds and procedures for director removal. These documents typically outline the permitted reasons for removal and the required processes.

Common grounds specified in bylaws include:

• Breach of fiduciary duty, such as conflicts of interest or unethical behaviour
• Consistent absence from board meetings without valid reasons
• Non-compliance with charity policies or legal obligations
• Loss of confidence in the director's ability to act in the charity's best interests

The bylaws also establish voting thresholds for removal. Most require either a majority vote or a two-thirds majority, depending on the situation.

Notice requirements are important. Bylaws typically specify how much advance notice we must provide before calling a removal vote.

Member-Initiated Removals

Members can remove directors through formal resolutions at member meetings or AGMs. This process requires careful attention to procedural requirements and voting thresholds.

Members can call for director removal by submitting a formal request to the board, calling a special member meeting, or adding removal motions to the AGM agenda.

The removal typically requires a special resolution with a two-thirds majority vote. Some charities may allow simple majority removal depending on their bylaws.

We must provide proper notice to all voting members, including the meeting date, agenda items, and specific reasons for the proposed removal.

The director facing removal has the right to attend the meeting and present their defence. Members should have access to relevant information before voting.

Board-Initiated Removals

The board can initiate director removal through internal board resolutions when a director fails to meet their obligations or creates governance problems.

Board removal requires a formal board resolution stating the removal decision and a majority or two-thirds vote by remaining board members, as specified in bylaws.

• Formal board resolution stating the removal decision
• Majority or two-thirds vote by remaining board members
• Proper documentation of reasons and decision process

Directors cannot vote on their own removal. The remaining board members must reach the required threshold without counting the affected director's vote.

We should ensure quorum requirements are met for the board meeting where removal is discussed. The decision must be properly recorded in meeting minutes.

Board-initiated removal works best for clear violations of duties or policies. For complex situations involving member concerns, member-initiated removal may provide better legitimacy and support.

Want to know how to remove a board member for policy violations? Our step-by-step guide shows Canadian charities how to handle the process fairly and confidently.

Step-by-Step Process to Remove a Director

1. Create a Board Resolution

A board resolution is a formal written document stating the decision to remove the director. The resolution should include:

• The name of the director being removed.
• The reason for removal (if required by the bylaws).
• The date and details of the board meeting where the removal will be discussed.

2. Notify the Director and Members

The director in question must be formally notified of the proposed removal. If member approval is required, a notice must be sent to all voting members specifying:

• The date, time, and location of the meeting.
• The agenda, including the motion for director removal.
• The voting requirements (majority or special resolution).

3. Hold a Vote at the Board or Members’ Meeting

Depending on the charity’s bylaws, removal may require:

• Board Approval – A majority or two-thirds vote by the board members.
• Member Approval – Some charities require members to vote on director removal. In this case, a special resolution (typically a two-thirds majority) is needed.
• Quorum Requirements – Ensure the required number of board members or members are present for the vote to be valid.

4. File a Change of Directors Form

After a director is removed, the charity must update its corporate records. This includes filing a Change of Directors form with the relevant government body:

• For Federally Incorporated Charities – File Form 4004 (Change of Directors) with Corporations Canada.
• For Ontario Charities – File the updated director information with the Ontario Business Registry under the ONCA.

The filing typically requires:

• The charity’s corporation number.
• The name of the removed director.
• The names and addresses of the remaining directors.

5. Update Internal Records and Notify Stakeholders

Once the change is legally recorded, update:

• The charity’s official records and meeting minutes.
• Bank and financial institutions (if the removed director had signing authority).
• CRA (Canada Revenue Agency) if the director was listed on charity tax filings.
• Donors and stakeholders, if the director played a public role.

Legal Considerations and Best Practices

• Fairness and Transparency – Follow due process to avoid legal disputes.
• Legal Advice – If unsure, consult a lawyer specializing in charity law to ensure compliance.
• Alternative Solutions – If removal is due to internal conflicts, consider mediation before initiating removal.

Notifying Regulatory Authorities and Required Documents

After removing a director, charities must notify government bodies and file specific forms. The process includes updating records with Corporations Canada or provincial authorities, filing change documents, and notifying the Canada Revenue Agency.

Corporations Canada Notification Process

Federally incorporated charities must file Form 4004 (Change of Directors) with Corporations Canada within 15 days of the director's removal. We submit this form through the online portal or by mail.

The form requires specific information about the removed director, including their full legal name, residential address, and the effective date of removal. We also need to provide updated information for all remaining directors.

Required details for Form 4004:

• Corporation number
• Removed director's personal information
• Date of removal
• Current director roster
• Corporate seal (if filing by paper)

We can file electronically through the Corporations Canada online system. The filing fee is typically $20 for electronic submissions. Paper filings cost more and take longer to process.

The form becomes part of the public record. Anyone can search and view director changes through the Corporations Canada database.

Provincial Requirements and Notice of Change

Provincial charities follow different rules depending on their jurisdiction. Ontario charities under ONCA must file director changes with ServiceOntario through the Business Registry.

We submit the Notice of Change form within 15 days of the removal. The form updates the corporate registry with current director information.

Provincial filing requirements:

• Ontario: File through Business Registry online
• British Columbia: Use Corporate Registry
• Alberta: Submit to Corporate Registry
• Other provinces: Check specific requirements

Most provinces allow online filing through their business portals. We need our corporation number and updated director information. Filing fees vary by province but are usually under $40.

Some provinces require additional documents. We may need to include board resolutions or meeting minutes as supporting evidence.

CRA Reporting and Form 4006

The Canada Revenue Agency requires notification when directors change at registered charities.

We file Form 4006 (Request to Change Director, Trustee, or Like Official Information) through our CRA business account.

Form 4006 updates the charity's registration details with CRA.

This form is separate from corporate filings and focuses on tax and charitable status compliance.

We access Form 4006 through My Business Account online.

Under our registered charity account, we select "Update registered charity information" and choose "Change director" from the menu.

CRA filing process:

1. Log into My Business Account
2. Select charity account
3. Choose "Change director" option
4. Complete Form 4006 online
5. Submit electronically

CRA also requires Form T1235 (Directors/Trustees Worksheet) with annual T3010 filings.

This form lists all current directors and their information.

We must keep this updated after any director changes.

The CRA may request additional documentation.

We should be prepared to provide board resolutions and meeting minutes if requested.

After Removal: Replacing Directors and Board Continuity

Once you remove a director, you must quickly fill the vacancy and update your official records.

The process involves appointing new directors, reporting changes to government authorities, and maintaining proper documentation for legal compliance.

Appointing Interim or Replacement Directors

You can fill director vacancies through different methods depending on your charity's governing legislation.

Under the Canada Not-for-Profit Corporations Act, the remaining directors can typically appoint someone to fill the vacancy.

Board appointments work when you have a quorum of directors remaining.

The board can vote to appoint a new director immediately.

This keeps your charity operating without delays.

Member appointments may be required in some situations.

Your bylaws might state that only members can elect directors.

Check your bylaws before the board makes any appointments.

Term length for replacement directors follows specific rules.

Under the CNCA, a replacement director serves for the remaining term of the removed director.

Your bylaws might set different rules for directors appointed by the board versus those elected by members.

You must ensure new directors meet all qualification requirements.

They need to be eligible under both the governing legislation and your charity's bylaws.

Some charities require directors to be members or have specific professional qualifications.

Reporting Appointments to Authorities

You must notify government authorities about director changes within required timeframes.

Corporations Canada requires notice of director appointments and removals.

Most provinces have similar requirements.

Federal reporting involves filing forms with Corporations Canada.

You typically have 15 days to report director changes for federally incorporated charities.

Late filing can result in penalties.

Provincial requirements vary by jurisdiction.

Some provinces require separate filings even for federal charities.

Check with your provincial corporate registry about their specific rules.

CRA notification helps avoid tax issues.

The Canada Revenue Agency needs current information about your charity's directors.

Update your charity information return to reflect the changes.

Keep copies of all filing confirmations.

These prove you met your legal obligations and reported changes on time.

Record Keeping and Documentation

Your charity must maintain accurate records of all director changes.

Proper documentation protects your organization and proves compliance with legal requirements.

Corporate records should include board resolutions about the removal and appointment.

Record the dates, voting results, and reasons for decisions.

Keep signed resignation letters if the removed director provided one.

Meeting minutes must document the removal process and new appointments.

Include details about member meetings or board meetings where these decisions occurred.

Note any statements made by removed directors.

Bylaw compliance documentation shows you followed proper procedures.

Keep evidence that you met notice requirements, quorum rules, and voting procedures outlined in your bylaws.

Update your director registry immediately after appointments.

This legal document must reflect current board composition.

Many charities also update their AGM materials to reflect the changes for member information.

Important Considerations and Potential Challenges

Removing a director creates legal risks and governance challenges that require careful attention.

Former directors may still face liability issues, while organizations must maintain proper compliance and handle any disputes that arise.

Legal Liabilities of Former Directors

Directors who are removed remain liable for decisions made during their time in office.

Personal liability continues for breaches of fiduciary duty or negligence that occurred before removal.

This includes financial losses caused by poor decisions or misconduct.

Former directors must still protect confidential information they learned while serving.

They cannot share donor lists, financial details, or strategic plans with outside parties.

Tax obligations may persist if the director signed corporate tax returns.

The Canada Revenue Agency can still pursue former directors for unremitted GST/HST or payroll deductions.

We recommend getting written confirmation that the removed director will return all organizational property.

This includes keys, laptops, credit cards, and access codes.

Document handover procedures clearly to avoid future disputes about missing materials or information.

Maintaining Compliance and Good Governance

Director removal must follow proper procedures to maintain legal standing.

Bylaws typically specify exact steps for removal votes and notice requirements.

Meeting minutes must record the removal process accurately.

Include the vote count, reasons given, and any statements made by the removed director.

File required government forms promptly after removal.

Federal charities use Form 4004 with Corporations Canada within 15 days of the change.

Update signing authorities at banks and other financial institutions immediately.

Former directors should not retain access to organizational accounts.

Board composition rules still apply after removal.

Ensure the remaining directors meet residency requirements and minimum numbers specified in bylaws.

Review insurance policies to confirm coverage remains adequate with the new board structure.

Handling Disputes or Contested Removals

Removed directors may challenge the removal process through legal action.

They might claim the procedures were unfair or violated bylaws.

Documentation becomes critical if disputes arise.

Keep detailed records of all meetings, votes, and communications related to the removal.

Consider mediation before formal removal if conflicts involve personality clashes rather than serious misconduct.

This approach often costs less than legal proceedings.

Legal counsel should review removal procedures when directors refuse to resign voluntarily.

Lawyers can identify potential challenges and recommend protective steps.

Removed directors might contact donors or media to dispute their treatment.

Prepare factual responses that protect confidential information while addressing concerns.

Board members should avoid public comments about removal reasons unless required by law or regulatory bodies.

Conclusion

Removing a director from a Canadian charity requires careful attention to legal procedures and governing documents. 

The process involves reviewing bylaws, holding proper votes, and filing required government forms with Corporations Canada or provincial registries. 

Key steps include creating board resolutions, providing proper notice to all parties, conducting votes according to bylaw requirements, filing Change of Directors forms, and updating internal records and stakeholder information.

We at B.I.G. Charity Law Group understand that director removal situations can be complex and sensitive.

Our team provides expert guidance to ensure your charity follows all legal requirements while maintaining proper governance standards.

Contact us at dov.goldberg@charitylawgroup.ca or (416) 488-5888 for professional assistance with director removal procedures.

Visit CharityLawGroup.ca to learn more about our charity law services and how we can help your organisation navigate these challenging situations with confidence.

Frequently Asked Questions

Removing a director from a Canadian charity involves specific legal steps and requirements.

The process varies depending on your charity's bylaws and whether it's federally or provincially incorporated.

How to remove a director from a corporation in Ontario? 

Under the Ontario Not-for-Profit Corporations Act (ONCA), members can remove directors with a simple majority vote. Send proper notice to all voting members, hold a members' meeting with quorum present, conduct the vote, then file updated director information with the Ontario Business Registry and update internal records.

Can I remove a director without their consent? 

Yes, director consent is not required for removal if you follow proper procedures. You must provide fair notice to the director being removed and follow all procedural requirements in your bylaws, including proper voting procedures and notice periods.

How do I remove a director from the board? 

Check your charity's bylaws for specific procedures, prepare a board resolution explaining the removal, call a board meeting with proper notice to all directors, vote on the removal resolution with the required majority, then update corporate records and file necessary government forms.

How do you write a letter to remove someone from the board of directors? 

Include the director's full name and position, clearly state their removal from the board, specify the effective removal date, reference the board resolution number and meeting date, keep the tone professional and factual, and send by registered mail or email with delivery confirmation.

Can a written resolution be used to remove a director? 

Yes, if your bylaws allow it. Get signatures from the required number of board members, provide copies to all directors including the one being removed, record it in meeting minutes, keep it in corporate records, and still file required government forms afterward.