RECO / TRESA · Governance
No agreement may restrict the sole director's powers
What the rule requires
The articles should forbid any unanimous shareholder agreement, voting or management agreement, or power of attorney that restricts or transfers the sole director's powers.
Authority: O. Reg. 536/20, s. 2 ¶6 (no restricting agreement)
What goes wrong
The articles expressly permit an agreement or arrangement that restricts or transfers the powers of the directors. O. Reg. 536/20 s. 2 ¶6 allows no such provision, and a prohibition elsewhere in the articles does not cure a permission that remains on the page. This is usually general-precedent boilerplate carried into a PREC without being reconciled.
What good looks like
The articles contain a provision to this effect.
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