Ontario Business Corporations Act
Part XII Auditors and Financial Statements
Section 148

Exemption From Audit Requirements

In respect of a financial year of a corporation, the corporation is exempt from the requirements of this Part regarding the appointment and duties of an auditor if,

(a) the corporation is not an offering corporation; and

(b) all of the shareholders consent in writing to the exemption in respect of that year. 1998, c. 18, Sched. E, s. 23.

Section Amendments with date in force (d/m/y) 1998, c. 18, Sched. E, s. 23 – 01/03/1999


Ontario Business Corporations Act
Part XII Auditors and Financial Statements
Section 149

Auditors

(1) The shareholders of a corporation at their first annual or special meeting shall appoint one or more auditors to hold office until the close of the first or next annual meeting, as the case may be, and, if the shareholders fail to do so, the directors shall forthwith make such appointment or appointments. Note: On July 5, 2021, the day named by proclamation of the Lieutenant Governor, subsection 149 (1) of the Act is amended by striking out “at their first annual or special meeting shall appoint” and substituting “at their first annual or special meeting shall, by ordinary resolution, appoint”. (See: 2020, c. 34, Sched. 1, s. 7 (1))

Idem

(2) The shareholders shall at each annual meeting appoint one or more auditors to hold office until the close of the next annual meeting and, if an appointment is not so made, the auditor in office continues in office until a successor is appointed.

Casual Vacancy

(3)The directors may fill any casual vacancy in the office of auditor, but, while such vacancy continues, the surviving or continuing auditor, if any, may act.

Removal Of Auditor

(4) The shareholders may, except where the auditor has been appointed by order of the court under subsection (8), by resolution passed by a majority of the votes cast at a special meeting duly called for the purpose, remove an auditor before the expiration of the auditor’s term of office, and shall by a majority of the votes cast at that meeting appoint a replacement for the remainder of the auditor’s term. Note: On July 5, 2021, the day named by proclamation of the Lieutenant Governor, subsection 149 (4) of the Act is repealed and the following substituted: (See: 2020, c. 34, Sched. 1, s. 7 (2))

Removal Of Auditor

(4) The shareholders may, except where the auditor has been appointed by order of the court under subsection (8), by ordinary resolution passed at a special meeting duly called for the purpose, remove an auditor before the expiration of the auditor’s term of office, and shall, by ordinary resolution passed at that meeting, appoint a replacement for the remainder of the auditor’s term. 2020, c. 34, Sched. 1, s. 7 (2).

Notice To Auditor

(5) Before calling a special meeting for the purpose specified in subsection (4) or an annual or special meeting where the board is not recommending the reappointment of the incumbent auditor, the corporation shall, fifteen days or more before the mailing of the notice of the meeting, give to the auditor,

(a) written notice of the intention to call the meeting, specifying therein the date on which the notice of the meeting is proposed to be mailed; and

(b) a copy of all material proposed to be sent to shareholders in connection with the meeting.

Right Of Auditor To Make Representations

(6) An auditor has the right to make to the corporation, three days or more before the mailing of the notice of the meeting, representations in writing, concerning,

(a) the auditor’s proposed removal as auditor;

(b) the appointment or election of another person to fill the office of auditor; or

(c) the auditor’s resignation as auditor,

and the corporation, at its expense, shall forward with the notice of the meeting a copy of such representations to each shareholders entitled to receive notice of the meeting.

Remuneration

(7) The remuneration of an auditor appointed by the shareholders shall be fixed by the shareholders, or by the directors if they are authorized so to do by the shareholders, and the remuneration of an auditor appointed by the directors shall be fixed by the directors. Note: On July 5, 2021, the day named by proclamation of the Lieutenant Governor, subsection 149 (7) of the Act is amended by striking out “shall be fixed by the shareholders” and substituting “shall be fixed by ordinary resolution of the shareholders”. (See: 2020, c. 34, Sched. 1, s. 7 (3))

Appointment By Court

(8) If a corporation does not have an auditor, the court may, upon the application of a shareholder or the Director, appoint and fix the remuneration of an auditor to hold office until an auditor is appointed by the shareholders.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection 149 (8) of the Act is amended by striking out “or the Director”. (See: 2017, c. 20, Sched. 6, s. 12)

Notice Of Appointment

(9) The corporation shall give notice in writing to an auditor of the auditor’s appointment forthwith after the appointment is made.

Section Amendments with date in force (d/m/y)


Ontario Business Corporations Act
Part XII Auditors and Financial Statements
Section 151

Auditor’S Attendance At Shareholders’ Meetings

(1) The auditor of a corporation is entitled to receive notice of every meeting of shareholders and, at the expense of the corporation, to attend and be heard thereat on matters relating to the auditor’s duties.

Auditor’S Attendance May Be Required

(2) If any director or shareholder of a corporation, whether or not the shareholder is entitled to vote at the meeting, gives written notice, not less than five days or more before a meeting of shareholders, to the auditor or a former auditor of the corporation, the auditor or former auditor shall attend the meeting at the expense of the corporation and answer questions relating to the auditor’s duties.

Notice To Corporation

(3) A director or shareholder who sends a notice referred to in subsection (2) shall send concurrently a copy of the notice to the corporation.

Replacing Auditor

(4) No person shall accept appointment or consent to be appointed as auditor of a corporation if the person is replacing an auditor who has resigned, been removed or whose term of office has expired or is about to expire until the person has requested and received from that auditor a written statement of the circumstances and the reasons why, in that auditor’s opinion, that auditor is to be replaced.

Idem

(5) Despite subsection (4), a person otherwise qualified may accept appointment or consent to be appointed as auditor of a corporation if, within fifteen days after making the request referred to in that subsection, the person does not receive a reply.

Idem

(6) Any interested person may apply to the court for an order declaring an auditor to be disqualified and the office of auditor to be vacant if the auditor has not complied with subsection (4), unless subsection (5) applies with respect to the appointment of the auditor.

Statement By Auditor Privileged

(7) Any oral or written statement or report made under this Act by the auditor or former auditor of the corporation has qualified privilege.


Ontario Business Corporations Act
Part XII Auditors and Financial Statements
Section 152

Disqualification As Auditor

(1) Subject to subsection (5), a person is disqualified from being an auditor of a corporation if the person is not independent of the corporation, all of its affiliates, or of the directors or officers of the corporation and its affiliates.

Independence

(2) For the purposes of this section,

(a) independence is a question of fact; and

(b) a person is deemed not to be independent if the person or the person’s business partner,

(i) is a business partner, director, officer or employee of the corporation or any of its affiliates, or a business partner of any director, officer or employee of the corporation or any of its affiliates,

(ii) beneficially owns directly or indirectly or exercises control or direction over a material interest in the securities of the corporation or any of its affiliates, or

(iii) has been a receiver, receiver and manager, liquidator or trustee in bankruptcy of the corporation or any of its affiliates within two years of the person’s proposed appointment as auditor of the corporation.

Business Partners

(2.1) For the purposes of subsection (2), a person’s business partner includes a shareholder of the person. 2011, c. 1, Sched. 2, s. 1 (8).

Resignation By Auditor

(3) An auditor who becomes disqualified under this section shall, subject to subsection (5), resign forthwith upon becoming aware of such disqualification.

Application To Court

(4) An interested person may apply to the court for an order declaring an auditor to be disqualified under this section and the office of auditor to be vacant.

(5) Repealed: 2004, c. 19, s. 3 (4).

(6) Repealed: 2004, c. 19, s. 3 (4). Section Amendments with date in force (d/m/y)


Ontario Business Corporations Act
Part XII Auditors and Financial Statements
Section 153

Examination By Auditor

(1) An auditor of a corporation shall make such examination of the financial statements required by this Act to be placed before shareholders as is necessary to enable the auditor to report thereon and the auditor shall report as prescribed and in accordance with generally accepted auditing standards.

Reporting Error

(2) A director or an officer of a corporation shall forthwith notify the audit committee and the auditor or the former auditor of any error or misstatement of which he or she becomes aware in a financial statement that the auditor or the former auditor has reported upon if the error or misstatement in all the circumstances appears to be significant.

Idem

(3) If the auditor or former auditor of a corporation is notified or becomes aware of an error or misstatement in a financial statement upon which he or she has reported, and if in his or her opinion the error or misstatement is material, the auditor or former auditor shall inform each director accordingly.

Amendment Of Auditor’S Report

(4) When under subsection (3) the auditor or former auditor informs the directors of an error or misstatement in a financial statement, the directors shall within a reasonable time,

(a) prepare and issue revised financial statements; or

(b) otherwise inform the shareholders.

Right Of Access

(5) Upon the demand of an auditor of a corporation, the present or former directors, officers, employees or agents of the corporation shall furnish such,

(a) information and explanations; and

(b) access to records, documents, books, accounts and vouchers of the corporation or any of its subsidiaries,

as are, in the opinion of the auditor, necessary to enable the auditor to make the examination and report required under this section and that the directors, officers, employees or agents are reasonably able to furnish.

Furnishing Information

(6) Upon the demand of the auditor of a corporation, the directors of the corporation shall,

(a) obtain from the present or former directors, officers, employees and agents of any subsidiary of the corporation the information and explanations that the present or former directors, officers, employees and agents are reasonably able to furnish and that are, in the opinion of the auditor, necessary to enable the auditor to make the examination and report required under this section; and

(b) furnish the information and explanations so obtained to the auditor.

Idem

(7) Any oral or written communication under this section between the auditor or former auditor of a corporation and its present or former directors, officers, employees or agents or those of any subsidiary of the corporation, has qualified privilege.


Ontario Business Corporations Act
Part XII Auditors and Financial Statements
Section 154

Information To Be Laid Before Annual Meeting

(1) The directors shall place before each annual meeting of shareholders,

(a) in the case of a corporation that is not an offering corporation, financial statements for the period that began on the date the corporation came into existence and ended not more than six months before the annual meeting or, if the corporation has completed a financial year, the period that began immediately after the end of the last completed financial year and ended not more than six months before the annual meeting;

(b) in the case of a corporation that is an offering corporation, the financial statements required to be filed under the Securities Act and the regulations thereunder relating separately to,

(i) the period that began on the date the corporation came into existence and ended not more than six months before the annual meeting or, if the corporation has completed a financial year, the period that began immediately after the end of the last completed financial year and ended not more than six months before the annual meeting, and

(ii) the immediately preceding financial year, if any;

(c) the report of the auditor, if any, to the shareholders; and

(d) any further information respecting the financial position of the corporation and the results of its operations required by the articles, the by-laws or any unanimous shareholder agreement.

Auditor’S Report

(2) Except as provided in subsection 104 (1), the report of the auditor to the shareholders shall be open to inspection at the annual meeting by any shareholder.

Copy Of Documents To Shareholders, Offering Corporations

(3) Not less than 21 days before each annual meeting of shareholders or before the signing of a resolution under clause 104 (1) (b) in lieu of the annual meeting, an offering corporation shall send a copy of the documents referred to in this section to all shareholders who have informed the corporation that they wish to receive a copy of those documents. 2006, c. 34, Sched. B, s. 30.

Non-Offering Corporations

(4) Not less than 10 days before each annual meeting of shareholders or before the signing of a resolution under clause 104 (1) (b) in lieu of the annual meeting, a corporation that is not an offering corporation shall send a copy of the documents referred to in this section to all shareholders other than those who have informed the corporation in writing that they do not wish to receive a copy of those documents. 2006, c. 34, Sched. B, s. 30.

Note: On July 5, 2021, the day named by proclamation of the Lieutenant Governor, subsection 154 (4) of the Act is amended by striking out “clause 104 (1) (b) in lieu of the annual meeting” and substituting “clause 104 (1) (b) or subclause 104 (1) (c) (ii) in lieu of the annual meeting”. (See: 2020, c. 34, Sched. 1, s. 8)

Section Amendments with date in force (d/m/y)

SCHEDULE

Shareholders’ Meetings, Time Extension and Means of Meeting

5 The operation of subsection 154 (1) of the Act is temporarily suspended and the following replacement provision is in effect during the temporary suspension period only:

Information to be laid before annual meeting

(1) For an annual meeting of shareholders held on a date that is in the period that begins on March 17, 2020 and ends on the 120th day after the day the declared emergency is terminated, the directors shall place before the meeting,

(a) in the case of a corporation that is not an offering corporation, financial statements for the period that began on the date the corporation came into existence and ended before the annual meeting or, if the corporation has completed a financial year, the period that began immediately after the end of the last completed financial year and ended before the annual meeting;

(b) in the case of a corporation that is an offering corporation, the financial statements required to be filed under the Securities Act and the regulations thereunder relating separately to,

(i) the period that began on the date the corporation came into existence and ended before the annual meeting or, if the corporation has completed a financial year, the period that began immediately after the end of the last completed financial year and ended before the annual meeting, and

(ii) the immediately preceding financial year, if any;

(c) the report of the auditor, if any, to the shareholders; and

(d) any further information respecting the financial position of the corporation and the results of its operations required by the articles, the by-laws or any unanimous shareholder agreement.


Ontario Business Corporations Act
Part XII Auditors and Financial Statements
Section 157

Financial Statements Of Subsidiaries

(1)True copies of the latest financial statements of each subsidiary of a holding corporation shall be kept on hand by the holding corporation at its registered office and shall be open to examination by the shareholders of the holding corporation and their agents and legal representatives who may make extracts therefrom free of charge on request during the normal business hours of the holding corporation.

Application To Court

(2) A corporation may, within fifteen days after a request to examine under subsection (1), apply to the court for an order barring the right of any person to so examine, and the court may, if satisfied that such examination would be detrimental to the corporation or a subsidiary body corporate, bar such right and make any further order it thinks fit.


Ontario Business Corporations Act
Part XII Auditors and Financial Statements
Section 158

Audit Committee

(1) A corporation that is an offering corporation shall, and any other corporation may, have an audit committee composed of not fewer that three directors of the corporation, a majority of whom are not officers or employees of the corporation or any of its affiliates, to hold office until the next annual meeting of the shareholders.

Exemption

(1.1) The Commission may, on the application of a corporation, authorize the corporation to dispense with an audit committee, and the Commission may, if satisfied that the shareholders will not be prejudiced, permit the corporation to dispense with an audit committee on any reasonable conditions that the Commission thinks fit. 2006, c. 34, Sched. B, s. 31.

Idem

(2) An audit committee shall review the financial statements of the corporation and shall report thereon to the board of directors of the corporation before such financial statements are approved under section 159.

Auditor May Attend Committee Meetings

(3) The auditor of a corporation is entitled to receive notice of every meeting of the audit committee and, at the expense of the corporation, to attend and be heard thereat, and, if so requested by a member of the audit committee, shall attend every meeting of the committee held during the term of office of the auditor.

Calling Meetings Of Committee

(4) The auditor of a corporation or a member of the audit committee may call a meeting of the committee.

Right Of Auditor To Be Heard

(5) The auditor of a corporation shall be entitled to attend at the expense of the corporation and be heard at meetings of the board of directors of the corporation on matters relating to the auditor’s duties. Section Amendments with date in force (d/m/y)


Ontario Business Corporations Act
Part XII Auditors and Financial Statements
Section 159

Approval By Directors

(1) The financial statements shall be approved by the board of directors and the approval shall be evidenced by the signature at the foot of the balance sheet of any director authorized to sign and the auditor’s report, unless the corporation is exempt under section 148, shall be attached to or accompany the financial statements.

Publishing, Etc., Copies Of Financial Statements

(2) A corporation shall not issue, publish or circulate copies of the financial statements, referred to in section 154 unless the financial statements are,

(a) approved and signed in accordance with subsection (1); and

(b) accompanied by the report of the auditor of the corporation, if any.

Section Amendments with date in force (d/m/y)


Ontario Business Corporations Act
Part XII Auditors and Financial Statements
Section 160

Interim Financial Statement

(1) Within 60 days after the date that an interim financial statement required to be filed under the Securities Act and the regulations made under that Act is prepared, an offering corporation shall send a copy of the interim financial statement to all shareholders who have informed the corporation that they wish to receive a copy. 2006, c. 34, Sched. B, s. 32.

Address

(2) The interim financial statement referred to in subsection (1) shall be sent to a shareholder’s latest address as shown on the records of the corporation. 2006, c. 34, Sched. B, s. 32.

Ontario Regulation 542/20 Under the OBCA Extension Of Temporary Suspension Period Extension of temporary suspension period for certain provisions 1. For the purposes of sections 1, 3 and 4 of the Schedule to the Act, the temporary suspension period is extended to end on December 31, 2021. General Regulation 62 Under the OBCA